One thing is clear: whoever wrote Races of the Dragon obviously didn't know what the definition of true dragons was.
I strongly disagree. I think it's very clearly intended by the authors of that book that DW Kobolds be True Dragons. They introduced fluff to support it (Kobolds formed from the blood of the first True Dragons, plus the constant references to how much kobolds wanted to be counted as proper dragons). They gave Kobolds age categories like True Dragons, despite having no other reason to do so... along with that rule that they don't suffer age penalties, and even a statement that assumes you become a chromatic or metallic dragon. That last is important, because Draconomicon itself talks about how Chromatics and Metallics are True Dragons, and it seems RoD really worked to make Kobolds count as such (it's in the table with age categories). They seem to have gone out of their way to make certain that Kobolds would be able to be True Dragons with the Dragonwrought feat.
They just had no idea that Dragons of Eberron was making the status of "True Dragon" an actually powerful thing, instead of just a title you could boast about.
But I have no idea why people are quoting the Monster Manual's definition... considering it's obviously a description, not a definition. It says itself that it's only talking about "known true dragons" implying other things could be a true dragon too, but it's just not something commonly known about. Its own definition doesn't even fit for White Dragons, which are in the exact same book. Clearly, it's saying "common True Dragons are generally like this" not "this is an exhaustive definition of True Dragons."
And I've yet to see anyone on the "DW Kobolds aren't True Dragons" side of the fence come up with a definition for True Dragon that's both created from actual rules quotes and doesn't cause rules contradictions (such as making listed True Dragons not count as True, or causing Kobolds to be both lesser and true).
But coming up with such a definition that includes DW Kobolds as True Dragons is trivially easy. Just take the definition from Dragon Magic, combine it with the Dragons of Kyrnn definition, throw in the Draconomicon one (reading "advance" as "to pass through") and call it a day. Nice and easy, no contradictions anywhere, no ignoring of sources (at least, no ignoring of sources that actually try to give a definition of all True Dragons that actually fits with all True Dragons).
We just combine these quotes:
"True dragons are those creatures that become more powerful as they grow older." (Draco 4, note that section has already made it clear that we're talking about dragon type creatures)
"Other creatures of the dragon type that do not advance through age categories are referred to as lesser dragons" (Draco 4)
"a true dragon (that is, a dragon with twelve age categories, such as a red dragon)" (Dragon Magic 87)
"a true dragon (a creature of the dragon type that possesses an age category)" (DoK, Draconic Vampirism feat)
Put these together and we get
True Dragons: A creature of the dragon type with twelve age categories. Also, it must become more powerful as it gets older.
Lesser Dragons: A dragon that does not advance through age categories.
This is a nice summation of the rules as written. It actually fits for all True Dragons (and DW Kobolds, of course, unless you want to make them both lesser and true, which makes no sense at all). And you don't get this whole "Kobolds are true dragons for the Draconic Vampirism feat and for Dragonpacts, but not in all other cases" nonsense.
JaronK