I have just begun Act 2.I have recently spent a fortune in the buying the "Draug Armor Diagram".Which i feel is pretty decently specced.I am searching for the Draug essence and armor fragments, dunno where if i will be able to find them.
I was wondering if there are better armors in the next chapter thus making my Draug armor obsolete or should i continue with making the armor.
btw i am using the kayran carapace armor now.

There are better armors in Chapter 3 for any character specialization.
I don't think Draug armor is worth making, but then again, why wouldn't you?

The best armor you get late game is Vran's armor for me. Draug armor is pretty neat with 50% for all the resistances. Worth crafting as you end up with alot of Orens unspent.

Act1 is the crafted Kayran armor.

Act2 i find the Katran armor is fine for most of the act or until you loot some armor. I think one is the armor of ban ard (unsure on the name, in caves under heneslt camp), Seltkirks armor is good too, and the other is from the Succubus.

The crafted Draug armor can only be made at the end of the act after you defeat the big Draug boss and honestly act3 is so short its barely used before you replace it with either the crafted Vran armor if you did the sidequests or the other looted armor.

I wouldn't bother with the Draug Armor... They dangle the schematic in front of you, but you can't make it until much later.

As noted above, arguably the best armor in the game is the Vran, so do the Gargoyle quest ASAP in Act3 to get it. Unfortunately, by the time you get it, there are only a few instances where it is really needed before the end of the game.

SPOILERS

For act two buy the dragon armor. The Draug armor is good but you don't fight the draug till the end of chapter two and then have to find someone to make it in chapter 3. But close to the guy that can make it are the parts for better armors. So you get to wear it for maybe 3 or 4 fights before you replace it.

SPOILERS as well....




Or, just do the Troll quest and get the Hunters armor early in Act1. It will last you awhile and is arguably slightly better than the Kayran Armor.

I used the Dragon Armor a lot, too. But it depends on what do you expect to achieve by using a specific set of armor. I, for instance, developed mostly the witcher and magic paths, with a bit of swordsmanship. I also used some mutragens for strenght and signs damage. Used swords with 2-3xYsgith rune. I finished the game with:

Ysgith Armor (and 2xdwarven and 1xmagic wrap enhancements)
- armor +32
- vitality +20
- vigor +1
- Incineration/Bleeding/Poisoning resistance +60
- vigor regen in combat +15%
- damage bonus on signs +11
- reduction damage magic +50%
Draug Trophy
- armor +5
- vitality +55
Elder Blood Boots
- reduction damage magic +10%
- Incineratio0n/Poisoning/Bleeding resistance +2%
Elder Blood Gauntlets
- reduction damage magic +15%
- Bleeding/Incineration resistance +8%
- max. load +15
Mage's Trousers
- reduction damage magic +10%
- Incineration resistance +10%
- Bleeding resistance +20%
- damage bonus on signs +5
- Heliotropic sign +5
Steel Caerme + 2xYsgith rune (57-66 damage; bleeding +16%; vitality regen +2; blade oils +4; chance of instant kill +4%)
Silver Addan Deith + 3xYsgith rune (55-61 damage; Bleeding +54%; damage to wraiths +4%; adrenaline +2; instant kill +2%)

All these plus some bombs worked great in the final battle, which was Letho for me - made it a breeze.

However, everything you want to know about the subject can be found on The Witcher Wiki; for instance, the Ysgith armor stats, in a nice presentation, are here:

http://witcher.wikia.com/wiki/Armor_of_Ysgith

think that would be Draug Armor. (You're broke when you get it though...was expensive to make...even more expensive to buy I remember) I remember getting the essense when I killed the Draug in the battle fields, but although I had it in my inventory, when I tired to make it the game said I didn't have it so I think I bought it somewhere. Bug? (Should have made notes #$%#)

Hunter's armor has +1 defense vs +30 vitality and +2 magic damage reduction for Kayran armor. Other stats are the same. So bottom line is + 1 armor or +30 vitality.