Niccolo Machievelli's The Prince is perhaps the definitive example of the Lawful Evil mentality. Often players and DM's mistakenly think this alignment is the "kindly, gentler" evil. It is anything but. Lawful evil characters are dangerous alone, and the danger increases with the size of the groups they inevitably form.
"The end justifies the means" is the creed of this alignment. Lawful Evil characters may actually have admirable goals, but the means that they are willing to take are, more often than not, deplorable. Lawful Evil characters are often better versed in the letter of the law than the best paladins, and they stand ready to twist every phrase to suit their goals. It is necessary to remember that exactly what is and is not evil will vary from society to society. However, evil always includes the complete and utter disregard for anything that stands in the way of the character's desires. An Evil character will hurt anybody or anything to get what he wants, be it wealth or pleasure (sometimes from the inflicting of the pain).
Lawful Evil characters believe that to further their own ends they must impose order onto others and dispose of by any means anything that threatens them or the order they impose. They may have the welfare of society superficially in mind, but their personal welfare always precedes that or anything else. Lawful Evil characters are meticulous, and they are also often very cruel in their aims. Despite all of this, Lawful Evil characters aren't completely incapable of love or other like emotions, although it is viewed as weakness. Weakness is dangerous in Lawful Evil societies, for if one shows weakness he will be disposed of in order to strengthen the group.
Lawful Evil societies are usually in the shadow of another group, and in that function they excel at undermining that authority in order to establish their own. On rare occasion Lawful Evil groups come into control of an area, and in that situation they are often chaotic seeming as they go about changing laws on whims to suit their goals. However, those goals are meticulously chosen and the roads to these objectives are well mapped out. A Lawful Evil group is ruled by the politically strongest individual. Politicking plays a large role in Lawful Evil groups, as a brash murderous attempt to the throne will be met by the backlash of the entire group without mercy. An example of an underground Lawful Evil society is the Mafia. [Or "<Orleron> yes, the Catholic church is a good example of a lawful evil organization" --Zebranky]