Good guys-GANDALF! or Aragon, because he comes closest to being second.
Bad Guys-Melkor. If you're going to pick a bad guy, it makes sense to pick the most bad of them all. Then again I liked Sauron's part in the fall of Numenor. Oh well, I will never decide. You're right, Saruman is ugly. Look at his hands when he's looking into the seeing stone. It's so creepy.