Shield blocks all damage except:
1.) earthquake (and megaquake)
2.) shockwave (and sonic pulse)
3.) ringer (and heavy ringer, olympic ringer)
4.) partition (and division)
5.) laser beam (and great beam, ultra beam, and master beam)
6.) shank (and dagger, sword)
7.) zipper (and double zipper and quadruple zipper)
Shield can now block earthquake (and megaquake).
Level 3 (unconfirmed)
Enemies cannot see that you are using your shield until after they attack
Level 4 (unconfirmed)
Shield lasts two turns instead of one.
Level 5 (unconfirmed)
A "safe base" is formed, which spawns an extra-large shield that can give protection to yourself and a nearby teammate.