Yes, you can get his weapon. I've forgotten the name of it, but I did get it once. And then he killed my party so I ended up just not getting it. I could probably go back and fight Odin now that I'm stronger. My thief was level 78 at the time, and is now 99.
Yeah, the Defense does suck. My Thief does way more damage than my Knight or my Black Belt, but he's usually dead after a round or two, nullifying that power. But the agility is awesome. My Thief almost always goes first, every round.But I don't really use the thief because their defense kind of sucks because of the armor they get to choose from. Also, I like some of the other special abilities more than flee. (not that its bad, keeping defense while running is pretty cool), but I've never had to run from a fight.