I'm with Kinseti on this: I disagree that we have any "evil" species in the game, even now.
We don't know enough about demons to judge them morally (We just like to invade their homes, rape their environment, and murder them when they get pissed about it.), so take goblins for example: It's true they kidnap children, but it's also true that they later employ those children into their armies, once they've reached adulthood.
And even if they're "brainwashed", they still fight. Severely traumatized people don't really tend to make great soldiers. Suicide bombers, possibly, fanatic cultists, or psychopathic killers, but not really soldiers you want to trust to go out and fight their own families.
If they're planning to use them for soldiers, they must be feeding them, educating them (you have to understand the orders, to follow them), and giving them atleast some level of quality care.
Your military personnel will *always* eventually achieve some level of political power (History has proven this, from the barbarians in Roman armies, to the Mamluk "slaves" who came to rule Egypt, to the black soldiers who fought in the American civil war.), and the implication would be for a very high degree of social fluidity, and a strong historical tolerance of those who are different.
Certainly, we've got a prejudiced cultural predisposition to view goblins as "evil", but considering that humans are as likely to be slavers in DF as they were on Earth (if not much more so, considering there's plenty of non-humans to enslave), I'd suspect a moral comparison would probably balance itself out.
Kobolds ofcourse are thieves, but I'm of the opinion that they steal to feed themselves, and that thievery-against outsiders, atleast (I've yet to see a kobold steal from another kobold)-is not condemned in their culture, as it has not been condemned in human culture (The ancient Celts, for example, who had a tradition of raiding cattle, not to mention stealing their brides--a practice which would imply all manner of disagreeable moral quandaries.).
Any ideas of "good" or "evil" imposed on ASCII pixels, I assure you, is entirely within the eye of the beholder. As the varied peoples present in the game continue to be fleshed out, I can only hope that this will become a more and more complex and tangled issue.