Iago of Shakespeare's Othello is widely touted to be the epitome of villainy. Why? Because he's just so damn evil. The dude's got it down on Othello and wants him to suffer, suffer, suffer, and suffer some more for good measure, and manages to contrive Othello's downfall with a smiling face and everyone's full trust. Why does he do this? Because somebody else got promoted, not him, and Othello gets to take the brunt of the blame. There's not really much reason beyond that given for his absolute hatred of the Moor. Dim-witted Othello trusts Iago completely which fact of course Iago takes shameless advantage of in order to manipulate and betray his "friend", and this is supposed to be why Iago is the quintessential evil villain. And because Shakespeare is revered as such a noble figure within the realm of English literature, and he's been dead for centuries, and scholars say so, it seems to be one of those general "facts" of the academic world.
Iago's kind of one-dimensional if you just take him straight out of the play.
No, seriously. Think about it. Iago haaaaaates Othello and wants to nail his tender bits to the wall and to make him suspicious of and despise his wife so that he'll smother her with a pillow and then feel terribly, terribly guilty about it when she finally dies of it a half-dozen agonized soliloquies and dialogue exchanges or so later. Cassio got promoted instead of Iago, and this fills Iago with vitriolic rage and loathing for Othello's littlest skin particle, never mind the rest of him. Speculation as to why he hates Othello so damn much is all well and good, of course, and ripe pickings for fanfiction (leave the temptation to slash alone, please, oh gods please leave it alone), but within the bounds of the actual play itself—let's face it, there's no real concrete reason given why Iago loathes Othello so much. We're just supposed to concentrate on the fact that Iago feels betrayed, the loathing is there, and now he's acting on what he feels and doing what he does best: being a manipulative bastard. He can gain dimension for possible reasons, and this is where the analysis and interpretation takes place, but there are characters who come off to me as deep and full of inner conflict and motivations and twists and turns of psychology that form an elaborate pretzel-knot, and then there are those who just leave me going double-you-tee-eff. Needless to say, Iago's one of the latter.
An Iago-type villain holds thin water nowadays, having become a stereotype: "You passed me up, so I'm-a kill you, you son of a bitch." I mean, most villains seem to be ambitious and aspiring towards power (for either destructive I'll-show-them-all-and-destroy-the-world or constructive I-can-make-the-world-a-better-place purposes), or because they've got vengeance cooking hot on their brains (this is Iago, who takes it to an extreme), or they lust after fame/infamy, or they're lusting for somebody that they can't have or want to impress, or they're just insane (which though it can be done well is more often used as a cop-out, like the typical oh-it-was-all-just-a-dream trope), or sundry other reasons. But it's a rare villain indeed who exists simply as a plot device of Sheer and Absolute Evil for the Sake of Hating So-and-So For a Reason of Some Kind. I mean, check out the Wikipedia section talking about Iago's possible motives—about the only clear and text-citable reason for hatred is that he was passed up for promotion. (Granted, it's been a while since I've read Othello, but I'm pretty sure I remember Iago having not very many clear reasons for his absolute hatred of Othello.)
Thus there are "evil" villains. But there are also villains who are not so much villains as antagonists, opposing the protagonist without necessarily being what you'd nominally call "evil". Look at the works of Hayao Miyazaki. His films are notorious for having villains who turn out to be not quite so villainous after all—they may not exactly be paragons of pure goodwill and altruism, but they tend to have a decidedly human air of reasonability about them. Check out the invading force in Nausicaa of the Valley of the Wind, Lady Eboshi of Princess Mononoke, or Yubaba of Spirited Away. I'll not post spoilers here, but they are human (or have humanizing qualities) as much as they are villains, and they're not pointlessly evil—or even exactly evil at all, since "evil" becomes a matter of perspective. As characters, they come off more multi-dimensional than Iago right off the bat without a great deal of analytical or interpretive work—and to my mind, if you need to work really hard to even identify (much less deconstruct) a villain's motivations and mental workings, then that means you're probably stretching things.
Want an example of a more one-dimensional "evil" villain? Check out Baron Von Rothbart of Mercedes Lackey's The Black Swan. He's a magician with a vendetta against unfaithful women—but why? The blurb on the back of the book says it's because he considers his wife's death some years previously to be the ultimate betrayal, but this isn't mentioned anywhere within the pages of the actual book, and it's a sad, sad day in literary heaven with the analytic angels of fiction weeping tears of blood when we have to turn to the summary on the back of a book in order to figure out character motivations within the story. (I mean, come on—I'm pretty sure the authors frequently have very little or nothing to do with the blurbs on back covers and on the insides of dust jackets, and there's been more than one occasion where the back blurb actually got facts about the story inside wrong.)
But back to Von Rothbart. The only hint we have of this wife's death = ultimate betrayal thing is a brief passage from Von Rothbart's daughter's perspective concerning violets. Yes, violets. Apparently Lady Von Rothbart loved violets (which the daughter Odile vaguely remembers) but there are no longer any violets growing on Von Rothbart's land because he has every patch of flowers found rooted ruthlessly out. (The poor woman doesn't even get a name—by calling her "Lady Von Rothbart" I've already given her more name than she gets in the story.) As far as I recall, that's the sole mention of any kind of wife-related angst, and the only possible hint of motivation for his going out and stalking young women to see if they're unfaithful, transforming them into swans when he finds them cheating on their men, and then kidnapping them away to his estate where they spend their days as swans and their nights as women clad in thin silk dresses. (Personally, I think Von Rothbart is a power-mad pervert with a major fetish for swans and cheating wives and way too much time on his hands, but I sadly have the feeling that my interpretation right there is giving him more character than is really there.)
So what of Krispy and I? We've been working on the "villains" lately. Motivation, background, and personal history, ambitions and deceptions and relationships with other characters. Several times we've had to back up and rethink character structure and motivation, and we're probably going to be zigzagging back and forth for a good while longer yet. Developing a plausible villain is tough work, particularly when there is a surfeit of villainous clichés lurking like potholes to trip up unwary feet. We want more dimension than simply single-minded ambition or a single life-changing tragic incident in the past, and I don't think either of us has brought up madness as a suggested motivational force or excuse for a character's actions. These elements can be present, but they have to be well-done and they can't be reason enough alone—not without turning said characters one-dimensional, or two-dimensional if they're lucky.