I am currently running a Pathfinder home-brew with a party of evil character PCs. Its an urban setting with multiple factions of diverse alignment and power sources. Basically two wanted to play 'evil'. One a playing a rogue wanted to take up levels in Assassin (requirement: evil). Another wanted to play a cleric of Urgathoa and play a necromancer styled cleric. The other three were not particularly interested or uninterested and created 'evil' characters.
The rogue/assassin is a pro, performs assigned assassination as they come up, but otherwise is a honorable member of society at least publically. The cleric is a bit depraved, however. He animating anything the party kills. Upon arrival to a 'terrorist bombing' incident by a third party, the cleric cast a Death Knell onto the injured and near dead at the site. (The rest of the gaming group is kind of aghast at his characters behavior.)
The other three are 'evil' only in alignment and vulnerabilities, but otherwise are playing their same neutral selves they play in any adventure.
We're up to 12th level, though after the next session, they will be 13th. Though the party has fought some paladins and inquisitors in their past adventures, they also fought other evil elements that infringed on their 'territory' or were otherwise a threat to the party, so were as eagerly defeated and/or dismantled to be rendered harmless.
The city is basically lawful neutral, under an evil regime with a wise ruler who has given concessions to the urban poor, and the non-evil churches to better maintain external evil agendas.
I think the campaign would serve better if the party were all good or neutrally aligned, rather than evil, but it was the player's choice so I accomodated. Again the cleric is bit too much for my taste. But he does have a price on his head (he was unable to Death Knell the last fighter the party slew, as reinforcements were arriving. The party caster created a teleport allowing him to take the party now, so they all left.)
Basically, if done right, it doesn't have to fall into back-stabbing, bringing too much attention to oneself or the party, practicing evil in tiny bits and otherwise being neutral members of the community. The party, so far is loyal to one another, each having his own personal secret agenda, and trading favors with one another in furtherance of each's agenda - none conflict with the other. No sense in deliberately creating party antagonism.
Its been fun, if a bit too dark at times.
GP