Once you have all four Gems and a Time Machine, all you have to do is Board it and you will enter the battle with Mondain. Make sure your hit points are fairly high before this fight. This battle takes place in a one-screen battle zone with a few special rules. Blink will teleport you around randomly, while Kill won't function and all and appears to make Mondain stronger. Magic Missile is a very powerful offensive weapon assuming you've maxed out your Wisdom, though magic-enhancing weapons don't appear to significantly affect its damage. Otherwise, a Phazor is quite effective.
Either before or after killing Mondain, you will need to destroy his Gem of Immortality. Doing this will take a hefty toll on your hit point total, but will weaken his attacks consierably, so it's worth destroying it quickly. To destroy the Gem, simply Get it. (If you kill Mondain before destroying the Gem, he will return to life, but in a weakened state that allows you to destroy it then finish him off again easily.)
Actually fighting Mondain is not much different than fighting guards at first, save that he has a ton of hit points. He will try to hit you in melee, casting spells if he can't reach. His psyonic shock and magic missile spells are weak, but mind blaster reduces all of your stats by 10%. If you're worried about mind blaster, make sure to keep Mondain in melee range, so keep pounding away with the most powerful attack you have. Note that, aside from Mondain's attacks, the random spurts of fire in his lair will occasionally damage you as well.
Once he's taken enough damage, Mondain will turn into a bat and run away. He will turn back if you leave him alone for a while, but there's no advantage in doing so. He will always move directly away from you. Fortunately on this battlefield you don't need a direct line to use ranged weapons, so chase him to a corner, then stand a few squares away and pound him with Magic Missile or a Phazor. Eventually he will fall. Congratulations, you've saved Sosaria!