It's a hard alignment to play, because it means you've always got to play for the losing side, but it's also very interesting.
That is correct but it would make playing a true neutral character very hazardous and would - most likely - lead to the player rolling for a new character very soon. The reason why is very easy to see if you think it a little. I'll clarify it with an example, using the cited sentence as the driving force of our brave player character (PC from here on):
Three men walk in the woods when being ambushed by five robbers. Our True Neutral PC hears the noise of the battle and decides to go take a look. When he arrives at the scene, the three wanderers have been able to kill one of the robbers so it's 3 wanderers against 4 robbers. The wanderers are still outnumbered and, thus, our PC takes their side in the battle. After a while two more robbers go down dead and it's now 4 wanderers (our PC included as one of them) against 2 robbers. Our brave PC realizes the balance has tipped and suddenly stabs the nearest wanderer in the ribs, killing him instantly and, before the rest of the wanderers can react, he manages to cause a fatal wound on another wanderer, thus making the situation 1 wanderer against 3 robbers. Once again our PC suddenly switches sides and decapitates one of the robbers with a mighty blow of his 2-handed sword. After killing the last robber the battle seems to be over but, the last wanderer attacks our PC, enraged of his seemingly chaotic behavior and, to revenge the death of his dear friends killed by the stranger. Our PC has no choice but to kill the last wanderer and, after successfully doing this he walks away, humming happily as he has done a magnificent job in maintaining a balance in the world...
I'm confident everyone got the point why PCs can not always take up the losing side, if they wish to stay alive and not be regarded as chaotic and/or evil. Thus, only the very brave, or the most stupid choose true neutral as their character's alignment and play accordingly.
Note: true neutrality does not (necessarily) equal apathy and detachment, on the contrary. There can of course be varying levels of involvement (just like on the "Good" and "Evil" sides, one can be peaceful about his beliefs, or one can be a raving fanatic) - even in neutrality, with one end being as I described in the example in my first paragraph and the other end being total apathy and detachment of everything and everyone.
True Neutral people don't believe in the moralistic or legalistic categories, regardless of whether the gods of their world do.
This is where I disagree. True neutrality (in morals and ethics) is like nontheism (in religious beliefs) - it does not promote or rule out anything, it just very simply does not pay any attention whatsoever to the subject (there is a huge difference between not believing and not caring, even if the results are the same).
Like it is irrelevant whether or not a Deity exists to a nontheist, it is equally irrelevant to a true neutral person what the moralistic and/or legalistic categories and systems of belief have to say about good and bad or right and wrong; true neutral only strives to maintain a balance and in that there are no good or bad sides, only more and less effective means to achieve the desired end result. From the viewpoint of a true neutral character a good-aligned character can commit an "evil" act by - for example - preventing a group of soldiers from dying, which turns a battle into that side's favor - the balance is tipped - while an evil-aligned character can commit a "good" act (in this case, good = helps maintain balance, bad = tips the balance to a certain side's favor) by trying to kill those soldiers.
Thus, if you take a very detached point of view, true neutrality is the most independent (and most indifferent towards others!) of the D&D categories.
Where is 'neutral' in this? How do you find average between zero and infinity? There isn't any clear balance point, any finite number would do but none would be satisfactory.
Here, the simplest dummy solution would be infinity/2 or, infinity divided by two. The problem, obviously, is that this figure would always be constant while also being undefinable; there is no real number to represent the result of the equation. Thus (and strong IMHO tags around this sentence), it might even best reflect the reality as it is: there is a seemingly constant change of events going on all the time, but no-one can tell what is going to change next or at what rate (this, of course, assuming that the sum of the change is constant and consists of small changes here and there the rate of which may vary, locally). Some, I believe, would call this entropy which, again, represents a problem (from a true neutral point of view): the law of entropy in a simplified form is "from order to disorder - from harmony to chaos", which implies a strict one-way route (in math terms: the entropy vector). This clearly and fully contradicts the goals of true neutrality. Thus, for true neutrality to be worth anything, there must either exist a force which defies entropy or, the whole assumption of balance being at infinity/2 must be wrong. There are many kinds of balances to choose from: Full stagnation (no change whatsoever) is a balance. Full chaos (nothing but change) is also a balance. Finally, the average of those two (constant change, infinity/2 if you will) is a balance too. While order defies chaos and vice versa, they don't necessarily defy balance - it all just depends on the point of view.
--- Edit: June 23, 2003
What I wrote about the different states of balance above is not entirely correct; the paragraph is missing the sentence: "Actually, balance can be at any point between complete stagnation and total chaos - the only requirement is that the rate of change is constant, be it zero or hundred percent or anything in between."
--- End of edit
For the sake of clarity, a conclusion must be drawn: true balance is at the point where the conditions are most favorable for the creatures pondering the subject since the other two conditions are the utter extremities and neither leaves space for free, rational thought - or even life. Thus, true neutrality's ultimate goal lies in maintaining the third one of the balanced situations I listed above: constant change. Man defies chaos by striving to create order. Nature defies order with the laws of entropy. True neutrality seeks to maintain the balance between these two.
Problem solved.