In OD&D's Men & Magic, alignment is discussed very briefly. It's implied that alignment is not a sliding scale; i.e., you can't be Lawful with Neutral leanings. You're Lawful, period. Neutral is stands on equal footing with Law and Chaos, not merely as the zero point between them. In practical terms, alignment seems to determine little more than which creatures you'll fight alongside when the armies draw up for ideological battle (an event that probably was more likely in OD&D than in later editions). That, and it might prevent you from using aligned magic items or put you at odds with an intelligent item.
In B/X, AD&D, and 3E, alignment became a "broad ethos of thinking" (1E DMG), a "guide to ... basic ethical and moral attitudes" (2E PHB), and a "general moral and personal attitude" (3.5 PHB). 2nd Edition is alone in all of the editions of D&D to give alignment a (short) chapter of its own rather than making it part of a larger discussion on fleshing out your character's personality.
4E takes a half-step toward resurrecting the older concept of alignment as cosmic force: "Alignments are tied to universal forces bigger than deities or any other allegiance you might have" (4E PHB). It also takes a half-step away from alignment altogether by making it optional.
I was glad to see the first change in 4E and ambivalent about the second. Making alignment optional wasn't as big a change as some people perceived it to be. Players always could duck alignment complications by choosing Neutrality or "Neutral Good leaning toward Neutral." That's aside from DMs who insisted players select an alignment but then ignored it in play.
What about DMs who didn't ignore alignment? What purpose did alignment serve in their games?
The first is to be a behavioral label and nothing more. Alignment acts as an aspect of personality, only slightly more important than "happy-go-lucky" or "compulsively tidy." If this is all it amounts to--and that probably was the case in most campaigns--then alignment could easily be jettisoned, and probably should be. Let players come up with their own personality labels.
The second effect of alignment is similar to the first, with the addition that it can double as a club for the DM to thwack the players with when they step out of line. This use for alignment mainly causes friction between the DM and the players without adding much to the game's enjoyment. It licenses the DM to close off certain actions from players by saying, "your character wouldn't do that." In its worst form, a DM strips away a cleric's or paladin's class powers because they've "violated their alignment." No player ever agrees with that judgment, and it's easy to foresee the arguments it will trigger.
The most hands-on use for alignment involves spells and magic items that have different effects depending on the user's or target's alignment. Interestingly, when alignment is used to create these types of mechanical interactions, it implies that alignment has a cosmic connection beyond the character's personality.
This, IMO, is where alignment has value--reflecting a reality larger than the character's philosophy. Maybe that's just my fondness for Michael Moorcock's tales of Elric and Corum showing through, but I think it goes beyond that. Tremendous storytelling doors open when Law, Chaos, Good, Evil, and Neutrality have real existential weight in your campaign. Epic tales about the struggle between good and evil have more impact when Good and Evil are cosmic forces, not just attitudes. Whether they're aspects of gods, greater or smaller than gods, or make gods irrelevant is a choice for individual DMs.
If alignment is nothing but shorthand for personality, then it should be dropped. Instead, encourage players to define their own philosophy of life. If alignment is to be a real choice for players, then it ought to be a real force in the world.
Steve
P.S. Several comments below suggest that alignment can or should be setting-dependent, and that's a valid notion. Good/Evil and Chaos/Law are just two possibilities. But no matter what the labels are, they don't change the point I'm trying to express here--that alignments need to represent something real about the game's cosmos. You can use D&D's stock labels or create and define your own, as long as they have weight.
P.S. Several comments below suggest that alignment can or should be setting-dependent, and that's a valid notion. Good/Evil and Chaos/Law are just two possibilities. But no matter what the labels are, they don't change the point I'm trying to express here--that alignments need to represent something real about the game's cosmos. You can use D&D's stock labels or create and define your own, as long as they have weight.