Presenting Choices in Encounters: Morality and the PC's

I remember playing way back in high school in the good old days - that being 2nd Edition(about 20+ years ago).  We were playing an evil campaign of PCs and I was an 11th level elf wizard.  We were in town to fetch some supplies, stay a few days to rest and then move on.  It just so happens that there were some girls there and we wanted to do them.

While we were off doing our thing the rest of the party went into town to see what was happening.  It just happens that someone recognized some of our party members and reported us to the authorities.  They tried to stop us all, but my character could not escape.  I was fresh out of spells.  So I surrendered.

The hearing did not go well (after they recited all my exploits). After a night in prison, they sentenced me to death by burning and brought me out into the town square and tied me up on a post in the middle of a wood pile covered in oil.

The whole town was out to see this execution.  I needed to escape and all I had left was my ring of spell storing with 3 fireballs in it.  Before they could light the fire, I let two of the fireballs out and killed off most of the crowd.  Right or wrong?  I don't know.

Morality has always been an issue at the gaming table.  The DM presents us with a choice and we choose to do good, bad and sometimes ugly. In the above example, I chose the ugly. The DM presented me with a choice, try to escape, or choose to surrender.  I chose to surrender, thinking that I could bluff my way out of the situation, through mistaken identity or some other way.

Yet when my sentencing was to be carried out, the DM still knew I had my ring of spell storing on and purposely placed hundreds of people in my path to freedom.  Being chaotic evil, my character had no problem snuffing the townsfolk, but me as a character, well let's just say I have not voluntarily played evil since that campaign.

A good DM has the knack of placing these characters in moral situation, which require them to either do what they think is right or go against everything they believe in.  What would you do in these situations?

1. The recurring NPC(let's say Bob for simplicity's sake) of the party has just drawn the attention of the PC's by lighting fire to an orphanage.  Bob is standing in the courtyard and tells the party that he has left five children in the building and if they hurry they could save them.  Or, they could choose to let the children die but take care of Bob once and for all and prevent any further senseless murders.  What would you choose?
2. You have just saved some children from being eaten by a hungry beholder.  You are located in the heart of it's lair.  The way back to civilization has been cleared out by you, but you know that if you take these children to safety, the second in command would have fortified the lair from any further intrusion, which makes returning to find the lost crystal that much harder.  What do you do?  Taking them further into the lair would probably get some of them killed, if not all of them(as a DM I would try hard to do so).  
3. You forcibly enter the living quarters of a goblin clan and systematically slaughter the defenders, wnding with the Chief.  All that remain are the female goblins and their children.  What do you do?  Do you spare them, thinking they are just children, knowing that when they grow up they will probably go out into the world an pillage like their fathers did?  Do you let them live so that one day they could take vengeance on the people who decimated their tribe?  Do you kill the womenfolk because they could bear more of those pesky goblins?  Or do slaughter them to prevent any further incursion against the town?  Do you relocate them, somewhere that is condusive to living without having to raid close settlements?  Do you sell them to slavery to make a profit?  What do you do?
4. You have been following the comings and goings of a cult that have been pulling random people off the street and have been sacrificing these people to their deity  once a month.  After many battles, you finally meet the person behind the cult's activities.  It is one of the PC's father!!!  What do you do?  He tells you that the only reason you survived birth is that he made a pact with the demon he worships and if he does not complete the sacrifice tonight, that PC will die! This is the only thing keeping the PC alive.  What will you do?
5. You have been hired by a town and paid a handsome sum to dispose of a tribe of giants in the hills that have been terrorizing the townsfolk.  They live a few miles outside of town.  As you approach the caves where they reside, you see from afar a peaceful tribe huddling down near the fire close to entrances of their cave dwellings.  There are some guards patrolling, but they are only carrying rudimentary weapons at best and look wholly disorganized.  The mayor has told you they were vicious and organized.  What do you do?  Kill them outright, or attempt to parley?  After a successful parley, you find out that the giants have not been harassing the town at all.  A PC notices gold flecks in the walls of the cave.  Gold in the mountains!!!  The mayor of the town jsut wants to eliminate the giants for the gold.  What do you do?  Slaughter the giants anyways and tell the mayor to shove it cause you are taking over the mines for yourselves?  Give the mayor his money back his money and threathen him that if he touches the giants, he will have to answer to the PCs?  Or would you hand over the mines to the mayor afterall?

These choice are difficult to say the least and the number of possible situations that the DM could put the player's in is limitless.  In the gaming world, there is no right and wrong, only good, evil, and neutral.  Playing your alignment takes a lot of work out of the decision making, but all in all the choice is really the players.

Would I feel comfortable playing another evil character?  Who knows, I would have to try it sometime.

Have you encountered similar situations?  Has your character done things that you - the player have been uncomfortable with?

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Thanks for reading.