Alignment isn't a reason to kill anything. You kill it if and only if it is threatening you or someone else with violence.
What happens when a basically good kingdom makes war on another basically good kingdom? Lots of Lawful Good people will end up killing each other... maybe even Paladins killing Paladins. Are these guys all becoming evil for killing someone who is good? Ridiculous.
Likewise, a merchant who sits around looking at Ye Olde Girlie Magazines all day is evil (lustful and lazy). Should somebody kill him? No, not unless he's about to stab somebody with a dagger. Then you kill him no matter what alignment he is.
Same goes for orcs, trolls, etc. If they're not attacking anybody there's no reason to kill them. And I can't believe that people trot out that "well if nobody does anything they'll grow up to be evil" argument... basically a justification for genocide. I can see Serbs and Bosnians saying this about each other: if you let those kids grow up, they'll grow up to be dangerous to us. That's the same as the old saw about the evil mastermind who takes you prisoner and will detonate a nuclear device unless you strangle (or rape, or whatever) this baby. As if it could possibly be my fault if he decides to set off a nuke - you're not the one responsible because you're not the one pressing the button. He's responsible if he presses it, and you're responsible for what you do to the baby. Nobody is responsible for what somebody else does, simple as that.