I really dislike games where a Paladin lives in fear of his Code. The Paladin archetype should be all about inspiration, conviction, faith, leading by example, and bringing out the best in others. Instead, due to the heavy handed letter of the law applications of the Code, the Paladin character often finds himself doubting his own actions, creating strife, restricting the choices of others, and holding back the character development of both himself, the world, and the other PCs.
The Code should be a clear cut, inspirational basis and guideline for the Paladins Way Of Life, a basis of philosophical ideas, not a strict set of rules that the Paladin must follow without exception, slight, or waver. The latter kind of application of the Code makes a Paladin a 2 dimensional, cardboard cutout that never develops as a real character, because if he ever develops in the "wrong" way, he loses viability as a PC in the game world.