Well, in my opinion no character can be entirely good or evil. The best fanfics I ever wrote were ones that I took full advantage of moral relativism. I need to make my Hero in the story seem less infallible and the Villain not entirely evil. This helps me give more depth to the character. However that being said, you can have a more traditional story. For instance the movie Gladiator has some of the best Hero vs. Villian dynamics I have ever seen. The trick is implementing that in a non cliche way. That's my two cents though. You probably knew all about that anyway but I just felt like sharing, hopefully it's at least a little helpful to someone.