My problem with alignment for the longest time has been that it is neither a truly open definition nor a truly absolute one, yet functions as both depending on circumstances.
Take a PC. With a PC, alignment is treated as a tendency, a way in which the character tries to act most of the time. If the PC fails to act in a given way once or twice (barring some particularly egregious circumstances), this is not really a problem -- as long as they are in the "seven times out of ten" range for the alignment, they are doing just fine. Rogues and Fighters are barely constrained at all by this system; certain Wizards are minorly; Barbarians, Clerics, Druids, and Monks somewhat more; Paladins are constricted heavily. But ultimately, a PC's alignment is never an absolute.
Conversely there are monsters and magic items. These are treated as absolutes, where alignment dictates utterly how they act and percieve the world. Now there are a few monsters that feel more open, particularly amongst certain sentient races (obviously elves, gnomes, dwarves, halflings, but only very, very rarely for orcs, goblins, and the infamous drow), but other than that, alignment is treated as a set of constricting guidelines.
Now it is the interface between these two that tends to bother me most. Take, for example, and PC with a magical item that requires a specific alignment. The PC will be defining his alignment in terms of broad guidelines; the magic item, conversely, has a checklist of acceptable and unacceptable behaviour ("I will only function for something that is Good -- this is a known quantity.") ... yet in the hands of the PC, the item suddenly switches over the variable definition of alignment as well.
Ultimately, I follow the "you will know them by their deeds" category with alignment. I am fine with items that try and push you towards given acts (and refusing to function fully if you do not act in accordance with its wishes) and I am fine with PCs having a choice in how they face given circumstances (and having their reputation amongst others vary due to this actions), yet I feel the alignment system as presented in D&D over the years has been just bad shorthand, an oversimplification of what should be a complex issue.