A natural armor bonus
improves armor class resulting from a creature's naturally tough hide. Natural armor bonuses stack with all other bonuses to armor class (even with armor bonuses) except other natural armor bonuses. Some magical effects (such as the barkskin spell) grant an enhancement bonus to the creature's existing natural armor bonus, which has the effect of increasing the natural armor's overall bonus to armor class. A natural armor bonus doesn't apply against touch attacks.
In the case of the sorcerer's draconic bloodline power dragon resistances, the natural armor bonus increases as the sorcerer gains levels. Other natural armor bonuses less than or equal to this amount are ignored, and if the sorcerer gets a higher natural armor bonus from a source other than his dragon resistances, he'll ignore his dragon resistances natural armor bonus in favor of the newer, higher one.
For example, a creature like a kobold that begins play with a +1 natural armor bonus to Armor Class and that is also a Sor3 still has but a +1 natural armor bonus to Armor Class (the natural armor bonus from his race and dragon resistances overlapping) but the creature still gains other benefits of the bloodline's powers.1 When the creature becomes a Sor9, he'll have a +2 natural armor bonus to Armor Class, his dragon resistances even more completely superseding his racial natural armor bonus to Armor Class.
1 Keep in mind, though, that the creature does, in fact, actually have both bonuses even though both can't be used. Were the creature to lose its race (perhaps upon being the target of the spell reincarnate), dragon resistances would still apply. Were the creature to retrain its levels of sorcerer to another class, the creature would keep its racial +1 natural armor bonus to Armor Class. Having both of this race and this ability, however, means the two effects overlap.