Every story has to have some form of confrontation for the POV to resolve, and the most common form of confrontation is the Bad Guy. The problem with a Bad Guy, however, is that they all too often are expressed as two dimensional cardboard cutouts, which undermines their quality as characters (and your Bad Guys are characters) and drags down the overall story. The thing which makes a Bad Guy into an interesting character is to recognize that they are only human, that they are fallable, and that they have their own sense of self worth: the only reason they are Bad Guys is because they are in conflict with the Good Guys.

A British commentator described the phenomonom in one of the addenda CDs to the extended 'Lord Of The Rings': "Many of the great atrocities of our time were committed by bureaucrats: people who had lost all sense of good and evil. For them, it was simply a job."

The thing which distinguishes a satisfying villain from a cartoon mad scientist is that they have values which bring them in conflict with society's norms. They are not Bad Guys in their minds: they simply have a mission which confronts the accepted values. Aside from their villainous actions, they are ordinary people with strengths and flaws who make for an interesting character study. More than that, they are capable of reexamining their values - of having mortal weakness and self doubt.

A good example of this is Deke Jennings, from my book 'Trial'. Deke is a Hells Angel, ex-con, drug pusher, and murderer hired to lead a political hit squad - about as nasty a dude as you could hope never to run into. And yet, while he starts out all gung-ho to exact revenge on society, the reality of what they are doing slowly eats at him until, at last, he can't deny the horror of it any longer:

One thing was foremost in his mind: they'd beat the odds again and again, and each time the pressure got greater. Now they were tangling with the National Guard, who were no storm troopers but still a lot tougher than the cops. And doing that network crew must have made them celebrities on the gov'ment's shit list. This couldn't go on much longer. Was it worth it? No, admit it: the New Order they were fighting for was just another cynical hoax. He wasn't fighting for them, never was. This was about revenge, and revenge didn't seem so important now, not after all the bloodshed they'd caused. The memory of that boy came to him, watching him solemnly like an hombre should. It wasn't worth those silent eyes to put some damned slime ball in the White House. It wasn't worth his life, or his teams' lives, either.
"You okay, Deke?"
Thing is, he was fond of them, proud of them. He asked them to take on the whole Goddamned Establishment, and they kicked every ass in sight. That meant something. Deep down inside, he knew there had to be more than running from the law and getting into gang rumbles. He shook his head in irritation. That was the zombies talking, or maybe his conscience.
"You with me, man?" Skunk was getting nervous.
"Yeah. Just thinkin'."
Skunk was his friend - more, his wheel man. Being an hombre was more than riding wild and free. It meant having things of value, things the straights couldn't see maybe, but real no less. An hombre looks after his bud, covers his back. An hombre is there for his wheel man, shares the joy and the pain. He didn't want to sacrifice Skunk's life any more than his own. Not for them stinkin' politicians.
"So, what we gonna do, man?"
Good question. He gazed across the parking lot at the two stolen vans and the rest of his boys. An hombre looks out for his bud, his team. There was something like eighty grand tucked in his saddle bags. A man could get along for a long time on eighty grand...buy himself a new identity...a new bike. Right. He had his revenge. After this job, he and Skunk would head for Nevada, and Deke Jennings could finally die.
"This is our last one, Skunk."
"Okay." Skunk eyed him curiously, sensing his moodiness. "Deke? Roy screws up again, we do him."
"Right."

Deke Jennings is a misfit who couldn't conform to the pressures of society, and was punished for it. Like all mortal, fallable people, his angst drives him to take steps which only dig him in deeper. But in the end, he has values which help him see his mistakes and step back. The aforementioned Roy, on the other hand, is a completely different sort of Bad Guy:

Roy wasn't in the Angels, preferred a Jeep 4 wheel drive to a bike, but he was bad news. He was a pudgy tough guy with a beer gut and cold piggy eyes that lit up when watching small animals suffer. The only time he smiled was when someone was hurting, or when he was high.

In other words, Roy is a true evil - a sociopath beyond hope of redemption. Normally you don't want a character like Roy because he is a two-dimensional cardboard cutout with no real potential besides bang-bang-shoot-em-up. I included him in the story as an antagonist for Deke, to emphesise Deke's potential for redemption, and to goad him toward his resolution.

That's the secret of a believable, satisfying villain: 'It meant having things of value, things the straights couldn't see maybe, but real no less.'