A easy personal DS to get is the 8th coldain ring quest. If your high enough to get oow armor you can probaboy solo most of the 8th coldian ring quest. It gives a instant click 8hp DS.
does this increase the effect of a damage shield applied to you via-enchanter or otherwise, or does this give you a natural 3 point worn damage shield?
It increases a pre-existing DS buff on you. If you have no DS buff already then it doesn't do anything. Cleric DS debuffs on mobs are not changed by the DS items as far as I have seen.