Unfortunately it seems many do not understand the nature of evil, or in that matter its opposite. The spells detect (alignment) or even know alignment must be RP with extreme caution. Just because a person is evil does not make them bad.
Some charecters are blatantly evil in all their actions, deeds and thoughts, but some are evil, because of the way they would do things, their callous attitude, or just general indifference.
Take for eg. a Well bred noble. They can be perfectly polite an well mannered in society. They have respect, title, and money. They hold dinners, outings and events and are often seen as natural leaders in a community. Yet even so, this same person can be nasty in private. Fail to pay taxes and they might have somone murdered as a warning. Insult them and they may spread nasty rumours about you. They might lie to gain more money or make themselves appear more adventageous. Red Aura? Most definetly.
Yet when people see that aura they start that stupid narrow eyes stuff, or start insulting the charecter, or even warn people about them. These are also people who have RP'ed with the char before and know that person to be what they are: A well bred noble, of good breeding poise and elegance. Sure, take note of the red aura but try and learn more about why it is red, than just assuming that that person might be the worst in the world. To just assume everything is black and white is to not allow yourself the opportunity to RP. The above example could end up being your best friend, could end up saving your life or helping you out in. Yet many will never know that charecter, or think them out of place in the cosmopolitian society of Waterdeep because they have issues over things that person does in private, that they do not know about and have no proof of.
There are many shades of evil, and not all are vile in nature, some are even quite tolerable. A general who gives no quarter, and thus has great success can be hailed a hero, yet his tactics make him evil.
A person stealing bread to fed their family accidently kills someone, are they evil??
Its a tough question, and letting a red aura be your guide shows a callous attitude that bespeaks evil itself.
At the other end is the people of good nature. I have seen many "good" charecters commit acts that are blatantly evil and no-one ever questions them because of their "Good" reputation (Note: a person with a "Good" reputation ahs the potential to commit the most evil

. Just because you are "good" though does not make you perfect. Yet many people assume cause their alignment is good, they can do whatever they like. Life is never like that. A "good" person can be just as self-serving as an evil person. Some great examples are some of the Presidents of the United States. Many have been men of great deeds, and have done great good for their country, yet have often made themselves quite rich, and indulged their own pleasures while doing it.
Good and evil exists in all things, but as in all things its not black and white. Evil DOES NOT mean bad. Does not mean in a in your face sword toting freak that will hack you too pieces. Good DOES NOT mean that you are a saint in all things.
All that being said, I think the RP between ZK and WD (as the two major zones) should be increased. I have never turned away anyone who has entered the Keep, unless of course they are stupid enough to show a symbol that is diametrically opposite to that which rules the Keep. You must remember that Zhentil Keep is the major trade hub for the Moonsea region, and as such they get all types through there. For them to in fact beat down on every trader who comes their way would hurt their trade interests, and the Lords would not tolerate evils that do such things. Note that ZK is not as tolerant of other relegions as WD is.
I believe that evil should exist in Waterdeep as much as good should exist in Zhentil Keep (And not just for the RP opportunitys - but because its how it would be

. A simple truth to remember is that sprout your mouth off in Waterdeep (wether evil or good) and you are likely to be arrested and punished. Sprout your mouth off in ZK (wether evil or good) and rthe exact same thing is going to happen. Sometimes you must remember that before both good and evil comes lawful, neutral, and chaotic. (And this has not even covered those who are the most blend - neutrals)
Kirkus however is right in saying that resources around that area are not as good as in WD. This can be hard on low levelers (especially mages), but this is something that I know is being worked on. So its just patience there really.
Personally I see some great RP, and some poor RP in both areas, but I have yet to see any need to put any kind of seperation in force, and in fact believe that we should encourage more G/N/E interaction, otherwise Rp gets really boring (WD - Everyone offers to heal or help. ZK - everyone offers to Kill or maim. *yawn* need some conflict (and conflict does not mean PK everyone!!!!!!!)
Either way, have fun, relax and enjoy yourself
I know I will.....
Stayne