A lot of these arguments are still focusing on the idea that Cedric could be a paladin if only he follows a few simple "acts" or "codes of actions." It's not really conduct because it the codes we're giving out here really have nothing to do with how he "conducts" himself at all. It just asks him to commit certain acts, and obstain from one or two specific others.
1.) Don't beat people up
2.) Fight evil to the death, wherever your God tells you it is.
3.) Champion the faith to the end
4.) Help people in need.
There's a few others, but they're all along the same vein. Basically, all Cedric has to do to become a paladin... is do a few good things. Otherwise, everything else from sleeping with women every week, having good drinks, and generally his attitude have nothing to do with anything.
The reason why I have trouble with this as a LG paladin is because this code is so easy to follow, that the party rogue could qualify. With flying colors. When you say that his mindset has nothing to do with it, that it's just what he does at the end of the day that counts, then I guess the halfling thief is also a paladin, or qualified for such. He doens't have to stop stealing, mind you. Maybe he's Robin Hood and he steals for what he deems a good cause. But as long as he's also willing to champion the faith, fight evil wherever, and help the needy, he's a paladin.
Someone mentioned something about cultures, and how culture would directly influence what kind of "paladin" would come out of it. And the silly question involved what a woman from the Sudan would classify as a paladin. While I guess it's a good point that each culture would have a different take on what makes a champion of their faith, I think you'll still find that Sudan woman likely claiming that a representative of her deity would still have more 'spiritual dedication' to the cause than Cedric had. Maybe he would still behave differently and have certain vices. But he'd probably have a lot more conviction than Cedric.
And that's the bottom line as to why I would let Cedric in my campaign, but periodically 'penalize' him at certain points. Cedric is a man of actions... but actions mean nothing. It doesn't matter if you give to charity all your life. That doesn't make you a good person. Or if you give gifts to your family every holiday, or on a birthday. To use one of those cheap phrases, "It's the thought that counts." Cedric is a pessimist. He does it, but he's no different from party fighter, party rogue, and party bard. They're all stuck in a war, they believe in championing the good, but ultimately they thinks it absolutley stinks. He's got the wrong attitude about the whole thing. He's willing to die -- but his reasons for dying are hardly virtuous at all. Sounds to me like he's willing to die
only because he knows there is a good afterlife waiting for him on the other side. In a sense, about the only thing Cedric has that I guess goes beyond the mentality of the rogue and fighter is the knowledge that he technically isn't risking too much of himself in the process. Though he may die... his deity will be waiting to pick him up on the other side.
If Cedric is a LG paladin... then my drinking, brothel-owner, thieving rogue is too.

Hey, we believe in the same causes.