Heroes? Well heroes simple do good based on normally a single line of motivation. Villains? They need a more complex driving force. More so than a complicated backstory designed to give him depth, a villain needs one thing: presence. When center stage, all eyes must be on him, and when absent, the looming threat he possesses must be noticeable in every corner of the world.
Sure some villains are evil just for the sake of being evil. The Joker is probably the best example of this sort of villain, but what do we truly know about him? Not much really and that is the most intriguing thing. What was it that made him this way? What really is his motivation.
To me a true villain has to be truly evil. They can't have any good motivations behind them that happen to cause harm on others. Illidan is the prime example of this type. Truly he has the best intentions and wants to be the hero but his process is what makes him appear to be the villain. While comparing this to someone like Sephiroth and he just wants everyone to die because he believes it is the right thing to do. In his eyes no one deserves to live.
The most interesting thing about villains to me is always what brought them to that point. No one is evil just because they are evil. At least no one who is a villain you love to be up against. It really is the motivations which keep us on the edge of our seats waiting for more, waiting to know "why". I have found myself disappointed in games for the very reason that question wasn't answered. You want to know you want to even for a second want to see things from their side and be in their shoes.
The greatest villains are the ones we remember. Which haunt us, and will always strike fear just with the simple mention. We remember them because of what they put us through and we won't forget them because of what they went through to get to that point.