I'm going to chime in on the 2ed DMGR series, also. Particularly, the (as was mentioned earlier) Campaign Sourcebook and Catacomb Guide, and also,Creative Campaigning. While the 3rd Ed. DMGs had that nifty NPC trait generator, one of the tables in Creative Campaigning has a quickie list of why that (34) fidgety (93)long-winded (63) pessimistic NPC is even interacting with the PCs. Not everybody they talk to is there to send them off to save the mayor's daughter from the dragon. Or even to save the dragon from the mayor's daughter... Maybe that NPC is simply seeking an opinon on something (29-30 on the CC "Motivations" chart);or he could run by, being chased by dogs (61-62). Or the guards (67-68). What the opinion may be about, or why the man is running.. ah, now those are adventures waiting to happen....
And yes, the Book of Villains is a great resource. Of the 127 pages in the book, about nine have statted villains, which are easy enough to cross over to 3rd edition. The real meat lies in the discussion of bad guys, bad guy organizations... and not-so-ordinary bad guys: cookie-cutter one-dimensional villains(hey, they have their place!), nature, public opinion.... Lawful Good villains....
Other resources from past editions that I plunder regularly: My BD&D Gazetteers. And if I could only find time to see if there's a way to work with the Ravenloft Nightmare Lands boxed set...
Good gaming!
Rob