There are two ways of looking at moderators:
One, and it's the way most moderators seem to see themselves, as authorities -- people with the power and authority to keep the peons in line.
The other (which I think is the right way to look at it) is as garbage collectors, hired to clean up spambot droppings and similar detritus.
The trick is, first, to appoint people with the garbageman mindset, and second, to make sure they don't drift towards the dictator mindset.
The problem is, of course, that there's no 100% reliable way to go about it. Or if there is, in 14 years of moderating everything from a BBS to numerous Web forums, I haven't met anyone who's figured it out. The best solution seems to be having a stable, sane, steady, and well-trusted person in charge -- Techno-Dann, in our case -- and having that person act as "benevolent dictator", able to appoint mods as needed to take care of shoveling up bot droppings if and when needed.
Moderating users' posts can be a slippery slope, because there's always the matter of lines and where you draw them. The "what is a flame?" poll in my FFN profile is still live, and it's interesting seeing the spread of the responses. There are people who draw the line maybe a little harsher than I do, and people who think all but the mildest and most apologetic concrit is a "flame", and many somewhere in between. The same thing happens on forums: What exactly constitutes a "personal attack"? How far is it to "off topic"? What exactly is "unfriendly" and is it different for different people? When you have people making judgment calls about that, you get drama.
My rules as moderator:
1. Never mod a discussion you're participating in. At the very least there is a perception of a conflict of interest; at the worst, you'll turn into a modzi.
2. Use the least-destructive moderation possible: For instance, move a post rather than editing it; edit it rather than delete it.
3. If you edit or delete a post, put a copy of the original on the mods' board for review.
Obviously 2 and 3 require a forum that has editing and moving capabilities, and somewhere to put the mods' board. The basic principles, though, remain the same.
Resentment and distrust of the mods is more destructive to an online community than any amount of off-topic posting, flaming, and board drama. 99% of the time, that distrust is self-inflicted, as the mods get above themselves (much like politicians) and see themselves as your masters, not our servants.
So, I propose that the title of anyone given moderation powers on this board be "Bot Manure Shoveler" and they be issued a patch depicting a shovel and a wheelbarrow.
Moderators, like fire, make good servants but poor masters.