I always consider neutral to be impassioned or world weary.
Only good people are passionate enough to make it their calling to pursue evil or do a good deed and neutral people usually just end up stepping on the plot of other people, ending up doing good deeds by luck or coincidence. Only evil people are angry enough to actively pursue a career of savagely hurting others, using their selfishness to great gain and then burning themselves out like a forest fire (evil is always either defeated or has to retire; when prestented as human). In fact a chaotic evil person might never truly 'win', since there's always something new to hate and destroy - which is another reason why fantasy stories used to probably end with the happy ending and the good guy (just more feeling of closure in the culture).
The difference is that neutral might think 'good is good and all, but I'm not going to waste all of my time and energy just doing good; i need to look out for myself too.' or say 'I'm emotionally damaged and angsty, so I don't want to do any good. I'll just look out for myself and will probably try to avoid doing good at every chance; but I won't be evil either, because that's the exact opposite and removes the whole point of being neutral'. For me, that's where it boils down.
The neutral person doesn't call his mother, while the good person does. The evil person goes by an alias, or prides family honor above all else (to the 'sick and twisted degree').
Favourite neutral characters?
Most neutral characters aren't ever presented as very likable, unless the plot is made to revolve around their exploits and your made to get inside their heads. Ie., Some cheesey movies would be like any movie with Van Damm, but he's not a favourite.
Lessee, Cammy White, C. Viper (street fighter on the brain :P ), and um... yeah, that's pretty much it.
Oh yeah, Good Fellas, Ray Liotta's character. :P
Weird examples? Think of weirder! I dare you.
I was actually thinking in terms of the ethical axis - Lawful, True and Chaotic Neutral. I prefer the ethical as opposed to moral anyway, there's less diversity and it's easier to cross reference and draw parallels with real life. :P
Simply having emotions will cause us to sway one way and favor something over the other
Think of it this way - such an NPC merely doesn't ever voice his opinions or act on them. He might be powerful in his own right, but is locked in service to another, either by cultural implication or otherwise.
It's like the samurai and the lord. If the lord is evil, the samurai obeys his commands and then elects to die honorably as justification for the evil he has commited (if he was good on the other hand, he would disobey the evil daimyo). Are good people traitorous? Certainly! It's all about what persuades them and their justifications.
A true neutral is usually a straight arrow - there is no justification. They are the most conservative of the lot. And yes, it's hard to envision them in real life because that's just not how our mainstream culture is (especially with capitalism and democracy - the only constant is change).
Even a druid, if you really knew them, would favor something over another, and that makes Hammie call BS
The druid that elects to heal everyone and doesn't get involved when there's violence? A bit like the european monk, actually.
I'm actually just going off the celtic druids in 'Eagles' series by Jack Whyte. Supposed to be set around 500 AD, the founding of Britain. :P