"How are mods made?"
We have no idea. No one knows anything about what mods do other than have their own forum and yank bad things.
"What would you expect from a mod?"
Honestly, reasoning, and accountability. However, by keeping what the moderators do strictly limited to those "in the know," we can't get that.
"Should mods be allowed to have opinions?"
Um, yes. Vendettas, no.
While I'm on the subject of mods, I think this whole system is reprehensible. I've been "on the other side" of the mod argument in many forums and irc channels and so forth, and I can wholeheartedly understand how you think the way you do. However, being on *this* side here and other places, I really honestly think the stonewalling is total BS. Saying (I'm making this up) "SeaJay was banned for threatening to beat up Uncle Pug, RavenC was banned because she was letting SeaJay use her account after his ban to threaten Uncle Pug some more," etc, would make this all go away. There are absolutely no privacy issues involved. If I posted a goatse link, got banned, and people asked, I'd fully expect a "Jonnythan, the dope, posted obscene links and got banned."
Right now, the way it feels on *this* side is "We [moderators] aren't confident enough in our decision to ban to make it public. I mean, if everyone knew RavenC and CobaltBabe were banned strictly by association, they'd be mad and leave."
I have no desire to know which mod did exactly what, but disclosing even the simplest specific instance that caused a ban would do volumes for the credibility here. There isn't any now.