- 2nd Edition Player's Handbook
There's always been something ridiculous about Chaotic Neutral as it is described in the above quote: lunatics and madmen are surely a different kettle of fish altogether - that is to say not in control of themselves, and therefore alignment-less. I prefer to think of Chaotic Neutral types as people who aren't necessarily malicious but who nevertheless prefer not to abide by society's rules. This doesn't mean self-conscious, "I'm mad, me!" buffoonery, but can actually ecompass quite a range of behaviours.
First is the Nihilist Type, or people who absolutely refusal to engage with society, because they see no purpose or reason in the universe, and therefore choose to set themselves apart from it. A good example in fiction is Bartleby, the Scrivener, whose only response to any request is to say, "I would prefer not to", and who eventually retreats into catatonic slumber and possibly death after refusing to eat. The members of the Bleak Cabal can be said to be the epitomy of this brand of Chaotic Neutral.
Second is the Hellraiser Type, or those who see themselves as completely unfettered by society in their pursuit of pleasure; they are not necessarily explicit hedonists or libertines from a political standpoint, but their beliefs and actions amount to as much. Hunter S. Thompson is the epitomy of this kind of Chaotic Neutral - "I hate to advocate drugs, alcohol, violence or insanity to anyone, but they've always worked for me." There is no malice in such behaviour but nor is there goodness.
Third is the Discordian Type - that is, those people who believe in 'Chaos' as a philosophical construct and seek to perpetuate it. These very rare characters aren't the tiresome kind of person who insists on being 'zany' and tries altogether too hard. They positively work towards disorder for its own sake, and are deadly serious about it. The Doomguard, who believe in 'preserving' entropy, and the Slaadi, who embody discord, encompass this kind of Chaotic Neutrality.
The main thing to escape from, when playing a Chaotic Neutral character, is the use of that alignment as an excuse for being unaligned - which is what in my experience it comes to signify. Like the other 'neutral' alignments - LN, NG and NE - the important point in CN is not the Neutrality but the 'active' alignment, in this case Chaos. For the Chaotic Neutral, morality is irrelevant and disorder is everything; it is in fact the most extreme alignment, rather than the least meaningful. And it is this which makes it the most difficult to play, not that it is the alignment for "lunatics and madmen".