One of the shticks about Eberron is that it’s intended to be more morally ambiguous than the standard D&D setting, and this obviously has potential conflicts with D&D’s absolutist alignment system. The minor resolution to this is to get rid of fixed monster alignments: in Eberron, you may well run into lawful good orcs, chaotic evil gold dragons, true neutral mind flayers, and so on. People don’t necessarily stereotype based on race — but if all the hobgoblins someone encounters are bandits, they may well have an “hobgoblin = bandit, shoot on sight!” mentality. On the other hand, they may feel the same way about humans from Aundair. This applies only to creates native to Eberron, I should mention — iconic extraplanar creatures like angels, devils, and elementals all retain their usual alignments 100% of the time.
The major fix to alignment is this: evil people are not necessarily bad people to interact with. Furthermore, there are a lot more of them in society than in many standard D&D settings. The innkeeper who shorts her customers, the gate guard who takes bribes to let smugglers in, the club owner who knows the club is a hangout for criminals but leaves it open because it’s profitable — probably all evil. Anyone who is strongly self-interested, to the point where other people are harmed by it, is probably evil. In addition, anyone who resorts to bad means to achieve their ends, even if they’re good ends, is probably evil: a crusading priest who’ll go to any length to weed out the heretics, a mage who sacrifices innocents for his experiments to find the cure for some horrible disease, an intelligence operative who tortures the terrorists to find out where they’re planning on striking next.
The upshot is that there are lots of evil people, and many of the evil people may be quite nice in some respects. Magic to detect evil exists, but it’s certainly not proof of anything. In some cases it won’t even work — undead always radiate an evil aura (in addition to whatever “real” alignment they have), and clerics always radiate an aura of whatever deity they worship.