They're very effective at what they do. You'll want either a KFF or vehicles to hide it behind on the approach though. The KFF is the more obvious choice for protecting dreds. On the whole, they work better the more of them you have, but you'll still need something to protect them from terminators, etc.
You can field just a single one in a mixed list, but it better not factor too heavily into your overall strategy. This goes for any single model/single unit choice that you aren't doubling up though. For example, if my army had a biker nob team, a killa kan team, a deff dred, and a meganob team, I wouldn't mind too much if I lost the deff dred, since each of these units can perform the same role as the deff dred when needed. What this does though is gimp enemies who lack AT or who have too much AT a bit, who may have the right firepower to destroy one of my units but not the right kind to hit another. It ensures my medium of damage delivery isn't chained to a single target type, so my opponent, if playing too much of a scissors list, can't cut my rock, so to speak.
The other approach is to load up on the dreds and kans and use a KFF, putting these armored units at the spearhead and following them with your infantry. This'll require the opponent to overload on a particular weapon type to blunt your threat - the problem being, if the opponent has the right kind of damage delivery, it's a very bad matchup for you.