They are very similar in meaning, and used interchangeably, however to defend can go a step further, in that when you defend, for example a country, you may take measures to counterattack. Protect usually means just to keep from harm but not so much by counterattacking.

Italian language makes also a distinction (proteggere = to protect ; difendere = to defend) /to defend/ is mostly used when an enemy is defined (aggressive intention); /to protect/ does not need an enemy, in the sense that natural adversities don't have an 'intention' or a 'will', so for instance: /protecting from the chilling wind/. Obviously, in figurative or metaphorical language, Nature can impersonate an enemy, so /to defend/ might also be used. Example: this paint protects the metal of the gate from corrosion.

Yes, you can use that in a verbal sense as well. For example, when you are in university and you submit your thesis (It is a paper which explains all your studies and contains your conclusions from your studies), a committee of professors will make any possible objections to your thesis proposal. You then give a defense. It is called a thesis defense. In your defense you reply with any arguments you can give to back up your thesis. The way I picture it... Let's say there is a family. A burglar breaks in. The mother runs to the children and covers them with her body. She is protecting them. The father goes after the burglar with a stick to fight him back and make him leave, and so he will not go closer to the children and his wife. He is defending them.

I'm trying to find a situation where one works and the other doesn't, but I am having trouble coming up with any where they aren't interchangeable.