On the power scale of natsu, he is an idiot. Charges in head first (literally sometimes) and never stops to think on strategy. He might just be (barring fairy law and glitter, but that would be cheating slightly), after guildarts, the strongest person in the guild. His only problem is be´ng a constant. When in a super emotional state he is nigh unbeatable, normally he is quite harmless.
Also, an explanation of his fight with the god slayer: Natsu eats flames. Flames are his energy. By consuming flames he recovers his energy bite for bite. I see his problem iwth godslayer flames is having to eat too much energy: for instande say you are eating a watermelon: if you eat it bite for bite nothing is wrong (normal, or indeed magical flames), but when you try and wolf down the whole watermelon at once you're gonna have a problem (god slayer flames). So natsu only needed to learn how to ingest and 'chew' the watermelon whole so he could take in the god slayer's flames. Now imagine the god slayer flames are not only watermelon, but with a nice cup of coffee. The watermelon and the water in the coffee si perfectly fine, you can take that. But the cafe´ne is something different. Sure you can take some, it might even help you, but with enough cafe´ne (especially if you are not used to the matter) you'll soon start reacting in a bad way to the stuff, hence explaining the problem with foreign fire substitutes and why he can still take them, if only in a small measure. I think Fairy Tail is one fo the better manga's out there. Though beaten by Shaman King (and it's derivatives) and hellsing, but they are pretty much the top for me.