KaeYoss said:
Even if a paladin has the principal to not tolerate theft, he will let that urchin go (without stern words, as they won't nourish the lad, and he has to steal again or he will starve). There's a time where you must bend those rules for the greater good. Another paladin will turn over the child, as he values law above all else.
I have to disagree with the idea that you can bend the rules for the greater good. For a pally (once again, in my book - remind me I have to send out free copies of "Enk's Guide to Paladins" as soon as I get it written.

), there is no such thing as the greater good if it means compromising a principle.
And example of how the pally could deal with the urchin. He catches the urchin stealing food from a street vendor, and the shopkeep doesn't see the urchin do it. The paladin might - knowing that the theft could be punishable by death - follow the urchin and apprehend him, only to verify that the urchin is stealing only to fill his or her little belly.
So what is the pally to do? Should he turn the child over to the authorites and have him or her put to death? Or should he let the urchin get by with it and go on to live a life of crime in order to survive? The answer is neither.
Instead, the pally should do something similar to this - impress on the child that - even though hunger was the reason for the theft - that stealing is wrong even if it is a matter of survival. Then, provide alternatives to stealing (in this case, do honest work for honest pay). Then, find a way for the urchin to actually take advantage of the alternative (possibly by taking the urchin in as a page or squire so that the paladin can teach and lead the urchin to better things). Of course, the urchin would have to make sure he or she paid the fair worth of thing stolen (maybe by purchasing something else under the watchful eye of the pally and then paying something extra as well in oprder to make up for the theft - all without the knowledge of the shopkeep, who might try to turn in the urchin, therby leading to the child's death).
These are the kinds of things paladins do!
When this rational is applied to the original question, it follows the same method - verify evil, confront evil, give an alternative to evil. Then if the person commiting the evil takes the alternative, support them in their good deeds. Or, if the refuse to change their wicked ways, smite them. And Smite them if necessary.