I'm trying to get four complete sets of Onion Equipment and I have almost everything. I need 1 Onion Helm and 2 Onion Gauntlets. So how much easier does it make the game? I've been killing Dragons for hours with no result.

lol

Erm -- don't think it makes it that much easier as to be spending all that time on it. Not enough reward for time spent.

I got the Onion Gauntlets. I've been at it for about 8 hours now getting the Helm. How much does damage get decreased by 9 defense?

i dont know how much damage gets decreased by 9 defense but personally i was not done with this game until i had 4 sets of onion equip

although i did defeat the iron giant with a knight, ranger, onion knight, and dragoon

Its not needed, and only recommended for the hardcore that can take the time to get it. However, you can beat everything in the game without it easily. I spent roughly five days, six+ hours a day, devoted primarily to trying to obtain onion equipment. In the end, I had almost full onion equipment. Close enough for me. When I used it, it was great, sure, but so unworth the time. Unless you got the time on your hands...