Absolute vs relative alignment...
One of the things that makes adjudicating whether an action is evil or good or lawful or chaotic is that, as modern, free-thinking people, we tend to have a pretty relativist view of alignments. Certain actions are justifiable in some situations, but not others. This "code of conduct" in any given campaign is up to the DM, and should be made clear to the players beforehand. It may, in fact, change from society to society, culture to culture, and nation-state to nation-state.
There is a slight problem with this, however. The only thing of value that I gleaned from the BoVD (and not because I thought it was distasteful - it just wasn't what I had envisioned) was the notion that the D&D universe isn't set up to accomidate "relative" alignments.
That is, in D&D, evil is Evil. With a capital "E." By the same token, good is Good, lawful is Lawful, and chaotic is Chaotic. Each of these is a legitimate force in the multiverse, and someone who has an alignment of neutral evil is, in fact, Evil.
It's set up this way, in part, because of the prevalence of magic that depends on alignment to work. Magic like "detect evil" for example.
Regardless of a paladin's code of conduct, one of their major defining drives is to vanquish evil. Therefore, smiting a child that vaguely registers as evil is really the same as smiting a demon that registers as evil, in the D&D multiverse. It's an unpleasant thought, one that most modern humans have trouble with, and provides a lot of the conflict that occurs between different players and DMs when it comes to alignments.
From a historical perspective, one could look at the Inquisition as a template for a mindset where evil = Evil, good = Good, and it's Good's job to destroy Evil. While the modern, more enlightened society looks at the Inquisition itself as evil, the Inquisitors, certainly thought that they were on the side of Good, and they used the most horrific forms of torture to save the souls of those that they accused of heresy.
At any rate, this conflict between absolute and relative alignments seems to be at the heart of most "paladin gone bad" stories that I've heard, and it really is the job of the DM to advise and adjudicate how this conflict resolves itself in his or her campaign.
DMG