The Black Monster is a creature of legend. It is said he is a demon, sent to devour the god. "Count 108 years, and when the Moon That Never Sets glows red, the Moon Child descends to the earth to fill the world with holy bliss." It is this Moon Child that the Black Monster tracks down every 108 years to kill.
 The Black Monster in the Story
The party first learns of the monster when they go to Bale, the capital of Basil. Minister Noish tells them the story of the Dragon Campaign, which occurs right before the Black Monster shows up in history 11,000 years ago.
The next thing the party hears of him is in Fletz. When the party meets a man named Fester, he tells a different story of the Black Monster. He says that instead of a Moon Child sent to bless the world, the Black Monster is sent to attack it.
While on the Queen Fury, Dart decides to ask Rose about the Black Monster because she knows so many things. She says she cannot help him but asks what he will do with the creature once he finds him. Dart says he just wants to know what he is and why he does what he does.
Shortly thereafter, the Queen Fury is rammed by the Ghost Ship. This ship was attacked by the Black Monster back when Neet was attacked. The soldiers were protecting Princess Louvia, but failed. Many of the soldiers' ghosts seem to think Rose is the Black Monster. They don't stop attacking her until they see Shana, and thinking she is the princess, leave in peace.
The next instance of importance occurs in the third disc, in Deningrad. Dart discovers that another survivor of Neet lives there: the Second Sacred Sister Luanna. She recounts her tale of the events: that she was with her mother and that the Black Monster killed her, saying that it was the only way to ensure that the Moon Child would not have any "evangelists." During this scene, the shadow of the monster strongly resembles that of a Dragoon.
Next, while on our way to see Emperor Diaz in Vellweb, Lloyd gives the information out again that the Moon Child blesses the world, and the Black Monster, for some personal reason, always kills it as soon as it is born. He says "he can't imagine himself being scorched to death by the holy light of him." Rose objects to this line of thinking, but Lloyd says it is true.
The last important instance about the Black Monster occurs in Vellweb, where all secrets are revealed. It turns out that the Moon Child is really the evil one, who is sent to the world to destroy it. The Black Monster is the creature who has killed to save the world for 11,000 years, even being called a demon. It is then revealed to be Rose, a hero of the Dragon Campaign who found out of the horrid plan and determined to stop it. She had lived since then, living with a race who hated her but did not know it.
And so the myth of the Black Monster was revealed. In reality, he was the "good guy" all along.