Well, I think that the makers of D&D have a pretty good working definition of good and evil.
Quote:
Good vs. Evil
Good characters and creatures protect innocent life. Evil characters and creatures debase or destroy innocent life, whether for fun or profit.
"Good" implies altruism, respect for life, and a concern for the dignity of sentient beings. Good characters make personal sacrifices to help others.
"Evil" implies hurting, oppressing, and killing others. Some evil creatures simply have no compassion for others and kill without qualms if doing so is convenient. Others actively pursue evil, killing for sport or out of duty to some evil deity or master.
People who are neutral with respect to good and evil have compunctions against killing the innocent but lack the commitment to make sacrifices to protect or help others. Neutral people are committed to others by personal relationships. A neutral person may sacrifice himself to protect his family or even his homeland, but he would not do so for strangers who are not related to him.
Basically, it's intent. There are many, many circumstances where it's okay to kill if you're good. Most of them involve killing evil people, or rabid animals.
There is also a lawful-chaotic axis, and with that, you can describe most people in terms of (lawful/chaotic/neutral) and (good/evil/neutral). Of course, such an absolute system doesn't work nearly as well in the real world, and most people (who want to get a more in-depth system) want to make it more like an intensity system. Something like Good 5, Evil 0, Neutral 2, ect. But that's neither here nor there.
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Now, onto the question. I think that it really depends on why they are killing, and who they are killing. If the sadist is just killing randomly for the joy of inflicting pain, then yes, he is evil.
If the sadist realizes that he enjoys inflicting pain, and doesn't want to do it to innocent people, and he then goes out and deliberatly puts himself into situations where a mugger (or rapist, or some other career criminal) will come to him, and he then kills the mugger, then I think he is sick, but not evil.
If the cold-blooded killer is doing it for good reasons, then it gets fuzzy. The main problem is ... what are good reasons?