Excellent question, I was wondering this myself. All it says in the MM is:
"A dragon knows and casts arcane spells as a sorcerer of the level indicated in its variety description, gaining bonus spells for a high Charisma score. Some dragons can also cast spells from the cleric list or cleric domains as arcane spells."
There's no MM errata on this particular tidbit.
I personally would give dragons the equivalent of the Eschew Components feat (T&B). I guess for spells where a component was very expensive or required (Trap the Soul) then I would rule they had to use it.
Especially with the larger dragons, I don't see how or where they could manipulate small material components.