Fraaz will take a deep breath of air and will float around the room. He will either glow orange or blue. If he is glowing orange, he is powered up with fire, and you need to neutralize that by using your boomerang to grab some ice from the ice torch and hit Fraaz with it. If he is glowing blue, use fire from the fire torch. This will deflate Fraaz. You might need to do this multiple times before Fraaz is completely deflated, depending on how much air he has breathed in.
Fraaz will be stunned when completely deflated, so you can go hit him with your sword. Eventually, he will breathe in some more air and float around. Repeat the process until the next phase of battle.
Fraaz eventually splits into two child-like creatures, one representing Fire and the other representing Ice. The top screen will show which one each mini-Fraaz is. As before, use the opposite power to neutralize each one. Hit the blue one with fire and the orange one with ice. When they are both stunned, they merge back into Fraaz, whom you can hit with your sword until he splits again.
If you are not fast enough in stunning the second mini-Fraaz, it might revive the first one, so be sure not to delay.
After a while, Fraaz will destroy the ice torch and fire torch. However, he will float around, spitting either fire or ice at you. Be sure to keep your distance to avoid getting burned or frozen. It's best to try to run in a direction away from Fraaz instead of to the side, because running to the side is more likely to result in you getting hit by Fraaz's fire or ice.
After spewing fire or ice at you for a while, Fraaz will switch elements and spit that at you instead. However, the fire flames or ice flames from before will still linger for a while, so you can use your boomerang to hit Fraaz with fire when he has switched to ice, or ice when he has switched to fire. Once you do this, he is stunned again and you can hit him with your sword.
Fraaz will split into two again, and the mini-Fraazes will leave fire flames and ice flames on the floor as before. You know what to do: use the boomerang to neutralize each mini-Fraaz with the opposite type of fire.
Finally, Fraaz will merge into one again, spitting flames at you more rapidly than before. Use the same strategy from earlier to defeat Fraaz.