Voadam said:
Code of Conduct: A paladin must be of lawful good alignment and loses all class abilities if she ever willingly commits an evil act.
Additionally, a paladin’s code requires that she respect legitimate authority, act with honor (not lying, not cheating, not using poison, and so forth), help those in need (provided they do not use the help for evil or chaotic ends), and punish those who harm or threaten innocents.
(Note: Thanks to Voadam for posting this - it makes it easier for me to give my answer)
The key with a paladin is to wed them to a religious order at character creation, then go look up (or make up) the belief and morality system of said order. The paladin becomes the strict defender and upholder of the religious faith, following things to the last letter even if they might seem odd to outsiders.
Next, a paladin should be kind and chertiable to those he meets that he has no reason to suspect are evil or corrupt. You know, things like helping the widow carry her water back to the house, giving a traveller a lift on his horse, and so on. Nothing major, just good deeds (and if he can preech his god's word in the process, all the better).
Finally, a paladin should respect the authority of the land unless he discovers they are fundamentally against his religious order and oaths. Here is where the paladin has to give a wide berth - not everyone can be expected to live up to his ideals and he knows that. Someone that misses the mark, isn't a believer, but acts in a manner that is compatable with his faith is fine. Someone who abuses their authority or oppresses people in a manner that it screams injustice to his personal code is discarded as "illegitimate."
A fellow faithful, especially another paladin, is a strong comrade of the paladin and should always be respected, supported, and aided (unless the paladin comes to know they have been corrupted and turned from the true path). You shouldn't abandon their body to the undead any quicker than a good paladin would abandon the body of a friend.
Take away the paladin's powers, but make the atonement needed to make up for his infraction light because, as a player, the concept is still new to them. After this, however, you may want to nudge them the next few times they do something out of line ("Are you SURE you're paladin would do that?), then if they persist... Say hello to the newest fighter in the party.