Lord Dredmor is the ruler of the dungeons and your mortal foe. Killing him is your ultimate objective, and his death will end the game, so don't be afraid to throw everything you have at him. However, he isn't going to make it easy for you.
Dredmor boasts an impressive list of spells, such as the feared Thor's Fulminaric Bolt, and backs it up with plenty of HP and a serious punch in melee. In addition, he will corrupt your equipment with any melee strike. His melee damage is high enough that it's almost impossible to achieve a block rating high enough to negate all of it, so your best bet is to bring a method of silencing him, such as Gag Order or License To Cast, along with every bolt and throwing item you can find. Silence him and dump all of your ordinance into his idiot face.
Magical Law is, fittingly, an excellent skill to pick against Dredmor regardless of your build, as it features both an extremely useful spell reflection ability and a silence ability. Killer Vegan is also highly helpful for warriors and rogues.
Given that he is the final boss of the entire game, Dredmor will only appear on the final floor of the Dungeon - Floor 10, or Floor 15 with DLC enabled. He does not appear in any specific room, however, instead spawning at a random spot and then proceeding to wander the dungeon alongside his minions. As such, always be on your guard while lich-hunting. Invisibility spells, potions or mushrooms wouldn't go amiss, either, and provide an excellent escape route in case he proves to be too much, granting you a much-needed opportunity to run away and heal.