SPIKE SPOILERS-----
Spike was a lame poet in Victorian England by the name of William the Bloody (because he was bloody terrible with his poetry), who was turned into a vampire by nutcase Drusilla (who was turned into a vamp by Angelus/Angel, who in turn was embraced by Darla 150 years earlier in Ireland). The tortured poet became an uncontrollable killer, utterly disrespectful of the vampiric traditions of caution against humans (even Angelus, the most terrible vampire that ever existed, and a rebel, abided by those rules). Spike was able to kill not one, but TWO slayers (one in China, during the Boxers' Revolution, and one in 1970s New York. That's where he got his signature leather coat.
Spike and Drusilla, the psycothic lovers, were described as the Sid & Nancy of vampiredom (Sid as in Sid Vicious, of Sex Pistols fame). The couple wrecked havok in Sunnydale time and again, but got separated after Dru put the moves on a demon in Mexico. Spike returned to Sunnydale, gave Angel some trouble over in LA, then got captured by the government and became a guinea pig for their neutering experiment. He now experiences mighty migraines if he tries to cause harm to humans. After that he tried to remain a villain, but eventually found out he was in love with Buffy.
It took him two seasons to prove his love (by suffering extreme punishment by the hand of Glory, the hell-goddess, while refusing to tell her that Dawn was The Key), and even so it took the musical episode to make Buffy act upon those feelings. Too bad that after they got their act together he turned into a jerk...
So Spike, IMHO, started as Chaotic Evil, turned Neutral Evil after being separated from Angelus and Darla (he had to be the Man of the House), then was forced to become Neutral by the chip (which prevented him from causing harm). If he ever becomes Good remains to be seen.