I was thinking about this more on a 2 hour drive I had to make today. Here are my thoughts:
As I said above, "I think truth is truth, and good is good, and that there are people who wrongly disagree." I mean by this something similar to what an Atheist believes about believers in God. The Atheist doesn't believe in God, but he readily admits that believers do. I don't believe in Moral Relativism, but I readily admit that some people do. And, more to the point, that a lot of bad people do. In fact, I think that it is hard to be a truly bad person if you don't believe in Moral Relativism.
When you watch the Godfather (or Watchmen, or countless others) you see people that are bad, but they don't believe that they are. They don't sit around and think of themselves as the bad guys. They think of themselves doing what needs to be done in their circumstances. Sometimes the storyteller is also telling you that YOU would also do as they do if you were in their circumstances. Sometimes the storyteller is simply telling you how the bad people rationalize what they are doing so that they can continue doing the things they want to do.
Would you really like to see villains who are simply bad for the sake of being bad? How interesting is that? How many people are really like that? I think an honest non-Moral-Relativistic storyteller has to show the logic that villains use to do the bad things they do. I think the storyteller can do this without showing Moral Relativity. Unless the Storyteller begins to make the same case the villains do, and then you have something else on your hands.
Well sometimes there are conflicting motives that are hard to pin down. Like killing people to save other people. Its hard to label someone as all bad or all good because often they a grey, they have a mix. I do believe that people around the world have different values, but I also believe there are universal ideas of what's bad and what's good that we all share.