I told my group I would be running a game and asked what they were interested in. The unanimous resonse was Eeeeeeviiiiiiillllllll!. (A big part of this was, I think, an evil campaign I tried to run a few years back that failed due to logistics) After some more discussion we determined the theme should be world domination. The only limit I place on their behavior (aside from naturally occuring consequences of actions) is "don't kill PCs unless they're possessed or something". It's been great fun so far. (look for my story hour,"Tyr must pay!", once I get my background stories from all of the players)
One thing that has been overlooked in this thread thus far is the mechanical differences between good and evil players. My evil party consists of a pair of death knights, a necromancer cleric, a weretiger, an assassin, a ghost/sorceror, and a shaper... kobold. Many of the abilities possessed by this party are not available to a good party. In adition, since the party is veeery evil we are also using the BoVD more or less as a core book, including sacrifices, trapping souls, binding demons, vile spellcasting, vile power compnents for spells, torture, etc... The group is also having fun building their dungeon, they put forth a staggering amount of money for their level (60,000 gp/lvl 10) to have the place enlarged and trapped.
There are several plot hooks falling into place for dealings with the devils of Carceri (Nerull is the official patron god of the party) And I'm looking foward to running some blood war based adventures.
On the other side of the screen, I get to play good-aligned creatures and NPCs in a combat role, which I haven't had much opportunity to do previously. All around it lets everyone involved explore a different side of the game from a mechanical point of view, whatever your moral view iof it is.
As for the "silly villans" problem, what is the problem there? If they're stabbing people at random, there are consequences and they either learn not to do it or learn to do it in a way that they won't get caught. And I'd absolutely love it if someone in the party tied a hostage to some train tracks that'd be a riot. (of course, if my party did that, they'd kill the target, animate them as a zombie, put some nondetection and alter spells on them, and then tie them to the tracks in such a way that the hero would have to go through a lot of trouble to rescue them only to find out that they are dead already... then the party kills them.)