1: The Villain must have a goal.
Simple enough, the Villain must have a goal-but just a goal isn't enough. It must be obtainable! Villains with unattainable goals or goals that are never stated feel a little flatter then others. Now, this guideline is very easily followed, so I'll skip this one.
2: The Villain must have a Motivation!
This is where the "evil for the sake of evil" thing fits in, although it's also used as a goal, as well. So often, the villain has a great goal, but no motivation to pursue it. Such villains have a "why are you here?" feel to them. Aside from having a goal, this is the easiest guideline to follow-hell, the motivation doesn't even need to be said, and can often be tied to the Villain's goal. A villain whose goal is cold hard cash doesn't need to explain his motivation-it's cash, mother truckers!
But other goals might need some explaining-a Villain seeking vengeance against the Hero, for example. In this case, the Reader would have to know about the Villain's family being slaughtered by the Hero. So, with that in mind, how does one create conflict? Simple:
3: The Villain's goal must conflict with the Hero's goal.
Simple in theory, but difficult in execution. There are two major ways to pull this off: The Villain and the Hero have similar goals, or goals that couldn't be farther apart.
The trick here is the details-and getting the devil in them. If the hero and Villain have similar goals, then they must have radically different ways of getting there, or the goal itself must be limited in some way. A good example is Gaston and the Beast from Beauty and the Beast-both wanted Belle's heart, but since there's only one Belle, only one can "win".
If the characters have radically different goals, it becomes easier. If the hero wants to overthrow the evil empire, and the Villain is the head of the evil empire, well, CONFLICT!
Regardless, the other two guidelines mentioned so far must still be followed. This guideline is mostly about keeping your Villain in the story, and giving him a reason for fighting the Hero. But there is one more guideline, likely the hardest and most forgotten of them all.
4: The Villain must be the Hero of his own story.
Yes, this is the one many have trouble with. Oftentimes, the Villain is just there to serve as an antagonist, forgetting about personality and development. Good villains always have a justification, no matter how flimsy and idiotic it seems.
This is where personality comes into play-if your Villain is an emperor who believes in efficiency, he probably won't worry about killing off a few thousand people in order to stymie political unrest, as political unrest unbalances the system and must be stopped!
But the villain also has to believe in what he's doing, or at least find no problem with it. The Joker from the Dark Knight (most recent Batman movie) is a good example: He believes that chaos and anarchy are natural things, and he is only a piece of the natural order.
In fact, let me show you how the Joker follows all four of these guidelines:
1: His goal is the spread of chaos (achievable, many times over)
2: His motivation is in keeping the natural order
3: Batman wants to protect Gotham, and the Joker often spreads chaos by causing harm to people and places-here, the Hero's goal conflicts with the Villain's, but conflict is still achieved.
4: This one points back to number 2: he sees chaos as a natural thing, and he is simply protecting the natural order. He sees no problem with chaos, so he has no trouble being evil, all the while believing himself a good guy-kinda.
Anyway, that's my bit on good Villains, feel free to sound off with any opinions you have.