Greetings!
I can't respond properly at the moment, as I'm about to go see a movie with my wife. However, upon my return, I shall provide a thorough and detailed response.
Semper Fidelis,
SHARK
(Edit--I have returned!

)
Well, I have seen many people play Chaotics that justify killing people they meet at the tavern because, well, "I'm Chaotic Neutral!"
Or, Lawful Good Paladins who trust the vampire to let the villagers live if the paladin surrenders his weapon. (Yes, his Holy +5 Avenger!)--with what result?
The vampire then incapcitates the paladin, and his evil minions proceed to slaughter the villagers while the paladin helplessly watches. Then, the vampire slowly kills the paladin, with the vision of the slaughtered innocents and the knowledge of his own failure swimming fresh before his mind.
Paladin is now dead. The vampire is then able to sweep in and kill the rest of the player characters, because without the paladin, they can't succeed in defeating the powerful vampire. The player of the paladin of course, is sitting there squirming, watching the vampire and his minions close in and kill the rest of the party, one by one.
STUPID PALADINS? STUPID, NAIVE LAWFUL GOODS? Yeah, I've seen them for sure!
I've seen Chaotic Good, and Neutral characters within a party get so wrapped up in "I'm an individual, I do what's good for me/nature/freedom." This of course, often leads to inner-party conflict.
The party is cruising down a river in a river boat. They begin to argue and squabble over a series of stupid, petty things. The party is observed by a Chaos Warband. The party is oblivious.
The party is slowly attacked by all manner of tentacled monsters and horrible creatures. Many of the party continue to argue, then say they want to do something about the two Frog-Sharks that are attacking the elf wizard. Nope, too late. They wanted to argue with the dwarf for three rounds while the elf wizard fought for her life. She bleeds to death right there on the lower deck. She's dead. Oh wait, what about the halfling?
What halfling?
The halfling was ripped in half by the cobalt-blue Minotaur after four rounds because the closest four player characters who could have helped him were more interested in arguing, until it was too late to make a difference.
It's all these stupid things, and more, that while I haven't quite gotten rid of alignment all together, I use it *loosely* and employ it for certain spells and hard-core items, but that's about it. "Detect Evil" for example, only detects evil outsiders, or creatures actively contemplating some evil action or deed of wickedness. For example:
(1) The character dressed in black at the King's Ball is thinking of stabbing the king in ten minutes, after the king finishes his dish of ice cream.
A detect evil spell will detect "evil"
(2) The same character is seen by the players in the tavern four hours before the ball. The players use detect evil.
The spell doesn't read anything.
Thus, I also manage to maintain the integrity of any murder mysteries or other crime-oriented adventures where the party, or the resident paladin, can't just "detect evil" and nail the villain, and go home. No, this way, they have to work for it. magic can help, but it just doesn't do everything, you know?
I think that alignment has to be loosely interpreted and somewhat vaguely applied, based on a variance of interpretations. This allows for rich character development, and avoids the concommitant one-dimensional caricatures that we so often see in gaming. There can still be the various alignments, just they represent "tendencies" rather than some kind of huge neon sliding ruler that is strapped to every characters back!
What do ya think?
Semper Fidelis,
SHARK