The traditional view assumes Satan was created morally good but with the ability to desire that which he shouldn't desire and that this wrong desire was internally motivated. This sounds strange, but since I'm not an angel, I'm hesitant to say it would be logically impossible for God to create such a being.
However, after considering some of Steve's arguments, I'm leaning toward the idea that God created Satan as his adversary and enemy. He created Satan because the role that Satan plays as a tester suits God's purpose, but God has no love for Satan and when it is time, it will please him to throw Satan into the lake of fire. As a part of God's creation, Satan is "good" in that he fulfills his role as an adversarial tempter in God's good plan. Maybe Satan is a vessel of wrath prepared for destruction. (It looks like I may have to change my view that God loves all of his creation.)
I tell my kids that mosquitoes are good because they provide food for bats, but I hate mosquitoes and it pleases me to fry them with a bug zapper when I find them in my house!
