As much as I like Dragon Shamans, I wouldn't put them any higher than tier 4. They have very strong and versatile healing/restoration abilities outside of casters, decent toughness and endurance (good hd, medium armor, a few immunities, energy resistance). Their power curve drops off by mid game when the casting classes start to accelerate, but that's the case for basically everyone aside from the casters themselves. Even if you play them "dumb", in a combat setting you're alternating between an attack, breath weapon, and healing/restoring which is hardly useless.
They do make a nice dip class, and benefit hugely from multiclassing.