Gosh I don't know what's kicked this off but I've recently heard two different podcasts discussing the pros and cons of playing Evil characters in fantasy settings.
Trying to remember - it hurts! - which podcasts it was, but I think it was Fear the Boot and RPG Circus.
Anyway neither show really hit what I thought was the "answer". Okay, now you're wandering what the question is ...aren't you. The question is "how" to play evil characters?
Why is that even a question? It's the question because most peoples initial view of "evil" characters is the baby eating back stabber who is some kind of constantly uber evil person. That's the problem. If you try to create a group of PC's of that type the group cohesion will not exist they will constantly be attacking each other!
What you need to do is accept that "evil" is more insidious. Look around the world we're in, look for evil and how it manifests.
For example, lets take the Nazi example. Nazi's imposed evil practices on the countries they controlled. They were organised, but they were also cohesive. We see this type of evil all of the time. What we call evil is so often the imposing of "evil" policy. So, be it a dictator in some desert country killing his own people, or some euro' with crazy ideas about people of another religion, they are imposing evil policies.
At the top of these organisations the people are generally quite evil , but even so they don't eat babies, or at least not in front of their followers.
When you want to play an "evil" campaign ( you sick git ) your PCs will have to be cohesive and organised. You could play the minions of the super evil character. Another alternative is to play bandits who are considered evil by everyone they pillage. Another alternative is to be a spy group, perhaps mercenaries who join up with the good guys but with a plan to double cross them.
In summary the group can be evil, but they have to remain a cohesive group. They can be "evil" to each other!