The special ability or effect of Five-Headed Dragon (also known as F.G.D.) is that it cannot be destroyed in battle as long as the attacking monster isn't a LIGHT monster. However, if the monster attacking your Five-Headed Dragon has more ATK, the difference in ATK will still be inflicted to your Life Points.
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Five-Headed Dragon does not come in any booster pack, it only comes in special sets of SD09, Dinosaur's Rage.
Five-Headed Dragon is Fusion Summoned by using any five Dragon-Type monsters as fodder.
Five-Headed Dragon.
No you cannot. When a monster says it 'cannot be special summoned except by..' it means that's the only way it can ever reach the field. Five-Headed Dragon can't be special summoned, except by Fusion Summoning it. Even if you fusion summon it and it is destroyed, it can't be brought back to the field by cards like Call of the Haunted, or Red-Eyes Darkness Metal Dragon.
It can indeed. Both have 5000 base ATK. Five-Headed Dragon cannot be destroyed by battle unless by a LIGHT monster, which Dragon Master Knight is. Normally both would be destroyed due to having the same ATK, but if there is another dragon on your side of the field, your Dragon Master Knight will be 5500 ATK and survive battle with Five-Headed Dragon.