I have always been of two minds about alignment. On one hand, I have found the AD&D system of LG, LN, LE, CG, CN,CE and N to be far too complex and restrictive at the same time. Even James' excellent house rule on alignments, which I find far more insightful and useful than the AD&D system, is a tad bit too restrictive. Sure, we have a lot of choice that covers several world-views, but that choice eliminates subtleties that exist in reality and in fiction.
I have also noted that the characters that I have played over the years often become through play. Although I conceive of a starting point and what I think is a personality and belief system for a character, these things are very rarely, if ever, what the character becomes through interaction with other players and the game world. Thus, on paper, my character may be Chaotic Neutral, but through play is very keen on and busy stamping out evil of every stripe. By the time the party has accidentally released a being of pure chaos into the world (an event a Chaotic Neutral character might have actually seen as a goal) my character is actually extremely uncomfortable with the idea and seeks to repair the damage done through his actions. What good has putting "Chaotic Neutral" on my character sheet done anyone?
On the other hand, I do believe there is a need for codes of behavior. Given classes like the Assassin, Cleric, Druid, Paladin, Ranger, and Monk, there has to be a means of determining whether or not the character is behaving in a manner that qualifies them for their profession. An Assassin who won't kill isn't an Assassin at all, and therefore could not continue to progress in skill as an Assassin.
Additionally, within Christianity, there is a very clear dichotomy between God and those who direct their lives and the world around them toward Him versus the Demonic and those who either actively work against God or passively turn their back to Him. As I've noted before, Schmemann leaves no room for neutrality in the Christian world view.
For gaming purposes, where does this leave me? I have come to appreciate the flexibility of the Lawful/Neutral/Chaotic alignment system. Lawful can encompass all those who are Godly, those who would fight on the city wall in order to save civilization from destruction at the hands of demonic minions, and/or those who desire to live an orderly life. Chaotic represents the demonic, and those forces that would destroy civilization in any form. Neutrality, to me, is a bit of a cop-out. The idea of Balance in any fashion is really a Lawful world-view. Thus Neutrality really means apathy.
However, in practice, this system means that all characters are going to be Lawful. No adventurer would be apathetic and thus Neutral, and no adventurer would be Chaotic because then they would be siding with the monsters, and personally I would never allow it (primarily because it is never fun to have that kind of destructive behavior in a group).
This leaves us with the conundrum of what to do with the Assassin, Cleric, Druid, Paladin, Ranger, and Monk classes. For this I find that there does need to be some kind of code of conduct set up from the very beginning by the Referee. This code needn't (nor really should be) all-encompassing, but does need to be restrictive. If you cannot or will not behave in some basic fashion, you cannot be these classes. In addition, I would encourage players to come up with an ethos through play. For example, within the martial arts world there are several styles and philosophies behind those styles. A practitioner of Karate thinks differently than a practitioner of Tai Chi. By the time the character has reach 2nd or 3rd level, I would expect a player to have settled into a personality and a set of behaviors that represent an ethos above and beyond their code of behavior. These in combination would then represent a base line for determining whether or not the player has acted counter to his code of behavior and thus lose the benefits of the class. This allows a creative cooperation between the referee and the player that will at the same time be challenging and entertaining.
I do believe that having such codes of behavior are integral to the entertainment value of a game. One of the most fun I have ever had playing a character was during a d6 Star Wars game. I played a Fallen Jedi who at the beginning of the campaign was a drunk and an alcoholic. The other players actually asked be to play another character because this one was too disruptive. I assured them that I had no intention of being a drunk forever, and by the time the campaign came to a close, my character was the de-facto party leader and had retired from the game to become the Master of two of the other PCs who wished to become Jedi. This evolution could not have been possible without the Jedi code of behavior.
In the end, I suggest to do what is fun. For me, having a restrictive code of honor that I must live up to is challenging, entertaining, and ultimately very rewarding.
11 hours ago