One other thought... a lot of you have said that paladins deserve some extra leeway, given their strict code of conduct and the potentially serious consequences for violating it. As a player, DM, and a writer, I have to disagree.
The paladin is a warrior for his god and/or his church. Of all the basic character classes, he's the only one inherently equipped and obligated to be a hero. In many cases, he's the leader of the party, and often the leader of the armies of good in the climactic battle against the campaign's villainous legions. His honor is more valuable to him than his life, and he would rather die than betray an oath or confidence.
Literature is rife with heroes like this - characters who are just this side of being perfect. There's even a word for them.
Tragic.
The more "realistic" and "gritty" a campaign is, the more uphill the paladin's life. Intelligent enemies find clever ways to undermine the paladin by forcing the issue of honor. Even without such interference, temptation is always an issue - what is right is not always what is easy, or even what is best in the long run (Hamlet learned that the hard way). As the campaign wears on, the paladin's role is likely only getting harder. Where once, any failure of duty meant consequences for himself alone, as a champion any breach of the code could be potentially catastrophic. Despite all this, paladins are only human (or gnomes, or halflings, or whatever), while gods are most assuredly not - and the harsher the god's view of evil, the less forgiving he's likely to be of mortal weakness. As the pressure mounts, they become only more likely to fail.
Paladins don't get happy endings. They die, slaughtered by superior numbers. Mortally wounded, they forgive men who betray them. In a moment of weakness, they betray someone else, and can never forgive themselves for it. They unwillingly (perhaps even unwittingly) break their vows, and are broken for it. They're the ones who leave weeping women in their wakes, the ones to whom the other party members toast in absentia. They're rookies in cop movies, and black guys in horror flicks. They can't shut up about how they can't wait to get out of Nam so they can go marry their girl back home (wanna see the photo?).
They're doomed to fall. Either they won't be good enough to remain paladins forever, or they will, and everyone else has fond memories of them.
It's not entrapment to play to this. AFAIC, it's part of the package. As long as the game's enjoyable for everyone involved, it's not an issue. That said, however, the player has no more right to expect a free pass than the DM has a right to throw the paladin into an impossible situation without warning.
The essence of drama is conflict, however, and the paladins have that all over. Any player who expects anything else from me is asking for it.