I'm going to be using B/X to run the campaign. (Assuming I ever find any interested players; anybody else freezing their posteriors off here in CNY interested in some old-school, Moldvay/Cook gaimng?) That means a Law/Neutrality/Chaos alignment system.
That does not, however, mean a Good/Neutral/Evil system. These aren't what I would strictly define as alignments - they're moral ideologies, as the Moldvay Basic rules define them, IMO. And I don't plan on using rules to manage character morality.
No, I want character morality to come from the players (and the DM, in the case of NPC's). I don't want some vague set of rules regarding strict moral codes determining if someone should kill a sleeping kobold, or save a damsel instead of using her to distract the dragon while he steals its loot. I want morality to come from play and from the players. That feels more natural to me, and more interesting.
I plan to use alignment in a much more literal sense: with which belief system does the character in question align him- or herself? These systems - Law, Neutrality (not really a system of belief, but more of the absence of one of the others) and Chaos - will be more like their counterparts in the Stormbringer RPG. Here, Law and Chaos are not reflective of one's adherence to any moral code as much as they are reflective of adherence to or defiance of a structured universe.
The Lawful character believes that the "natural" order is one of rules and regulations, of balance and justice - regardless of the consequences. The Gods of Law are strict, just (often to a fault), slow to act but swift to rebuke those who disobey the order they embody.
The Chaotic character believes in randomness and entropy, in a universe where balance and justice are nothing but wishful thinking. The Gods of Chaos are carefree and whimsical - oft-times dangerously so - and care little for the concept of cause and effect.
Any character who is not aligned to one of these systems is of Neutral alignment. There are no Gods of Neutrality. (Although the Risen Gods, those who have "been promoted from the ranks" - so to speak - of mortal men, may be of any alignment. However, as most true believers in Dark World will be quick to point out, the Risen Gods are not true gods. Their power waxes and wanes as belief in them does the same. Only the True Gods of Law and Chaos are forever.)
In terms of morality, none of these systems dictates any moral code. For example, a Lawful character may be the most vile evil-doer in all the land and still be a devout adherent to Law. He may even use his Lawful beliefs to excuse his own evil actions.
In Dark World, only humans use the terms "Law" and "Chaos" when talking about their beliefs. Other races may follow gods or have belief systems that fall into one of these human systems, but their followers have no concept of this universal dichotomy that humans have constructed.
The elves in Dark World, for instance, have no gods. They do, however, have a system of belief that holds that the universe is cold and impartial, and that natural forces always achieve balance in some form or another. In this sense, all elves are Lawful from a human perspective. (Elves in my Dark World campaign are not the tree-hugging elves of common thought; nor are they Tolkien-esque emo-rtals. They are distant, otherworldly creatures, beings that embody the essence of magic in their utterly alien nature and demeanor.)
Dwarves, on the other hand, are believers in the four elements as intelligent forces. They see them as capricious universal powers, helpful one moment and destructive the next - with no predictability toward either state. To them, the universe is as likely to help you as it is to squash you underfoot. Thus, life is to be lived to the fullest in all aspects - making them Chaotic in the human worldview. (Dark World dwarves are artisans and craftsmen beyond compare. However, the same deep passion for life that feeds this artistic nature can take on a destructive aspect, making some dwarves among the hardest drinkers, the most violent warriors, etc.)
Other creatures follow similar lines. Sometimes, they cannot easily be lumped into the human alignment system, but that system is vague enough to - usually - adequately represent a creature's nature. The farther a creature is removed from humanity, the less likely it is to be identified with Law or Chaos. These creatures are then - by default - Neutral.
With regards to the blog post I mentioned at the start of this piece, wherein the author, Evan, wonders at how to fit devils and demons into the B/X alignment system, here's my take: devils and demons have no alignment to Law or Chaos, nor any belief system that could be squeezed into those molds, making them neutral entities in the human worldview. They are beyond such concepts.
However, if they're the devils and demons of "classic" D&D, they may be considered to align themselves with Law (for the former) and Chaos (for the latter), as these are the L/N/C components of their nine-point alignment. Since Law does not equal good and Chaos does not equal evil, the distinction of a "Lawful" devil does not create a problem. They're both still evil, it's just that one group of creatures believes in balance and justice (not to be confused with fairness) while the other believes in randomness.
I hope some of this makes sense...
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