[Pitchwife]

Great stuff and loads of engaging thoughts by everybody - thanks for a great read! Unfortunately, I haven't read Eddings myself, but anyway, here's my farthing's worth on some of the points that have been addressed up to now.

Originally Posted by davem

And the removal of Eru - or his inclusion - depending whether you read LotR as a stand alone work or in the light of the Sil, actually changes your experience of the story profoundly. Without Eru one is in Eddings/Pullman territory, where one's acts can determine the fate of the world as well as the fate of one's soul. Hence, the quest is given infinitely greater significance & meaning.

Indeed, and I think this goes to show once more Tolkien's wisdom in avoiding any overt statement on the religion/theology of Middle-Earth in LotR. Wouldn't it be boring if the characters had read the Ainulindale and knew that everything will work out fine in the end? It will, of course, but our friends (except, probably, Gandalf/Olórin) don't know and can't be sure of the outcome; they may get some fleeting glimpses and intimations of light and high beauty beyond the reach of the Enemy, but in general, they can only hope and do their best.
However, I can't agree that in Tolkien's world, the characters' actions affect only their own souls. For example, while Frodo's sacrifice may not have made any difference to the fate of the world in the long run, it made a huge difference to everybody living in Middle-Earth in the meantime. Maybe if Frodo had failed (e.g. by killing Gollum instead of having mercy on him) and Sauron had regained the Ring, the Valar or Eru himself would have intervened to prevent Sauron from gaining dominion over all Middle-Earth, but even in this case, what would have been the cost in human/elven/dwarven suffering, if another War of the Powers, another Drowning of Númenor had occurred?
As to your point about the Elves' 'embalming' desire for perfection being evil according to Eddings' standard, isn't it interesting that it was chiefly the Noldor (Galadriel!) who were obsessed with arresting change, much less the Sindar and Silvan Elves, and that they clearly caught the disease in Aman? They got hooked on changelessness in the Undying Lands and, as Boro has said, tried to reproduce the conditions they had got used to there in M-E. Moreover, the Valar themselves weren't entirely innocent of the desire to resist change, shutting their Earthly Paradise off from events in the rest of the world. I'm sure Tolkien wouldn't have gone as far as calling this desire 'evil', but I think I remember he censured the Powers for their fainéance.
As to good intentions producing evil results, my first thought reading that great quote from Lewis was - Gandalf, if he had taken the Ring.

Just a few more stray thoughts before I let my wife at the computer:

Boro: All I can really know for certain is death and pain.
Nogrod: Why be so pessimistic? Why don't you say that all we can really know for certain is life and happiness?

Isn't it obvious? Happiness is never certain; death always is - i.e. it's the only thing that's guaranteed to happen to all of us sooner or later; that's why life and happiness are so precious (no Gollumish pun intended). "The future is uncertain, the end is always near."

Gwath: But I don't understand where good can come from if it does not come from God? How could such a thing exist in an impersonal, arbitrary, random world unless we make it ourselves

Sorry for philosophical nitpicking, but this is a perfect example of thought stumbling into the pitfalls of language. Just because 'good' can be used as a noun in most European languages, we tend to think of it as a thing or entity of some sort that 'exists' and, because it exists, must be 'made' by somebody; but good is nothing that exists, its just what we do - and so is evil.
But if you really mean where our standards for judging certain actions as good or evil come from, I find Nogrod's answer quite satisfying.

No time for more at the moment, but I hope this will go on for a while.