This is the first game where one side is evil and the developers go to great lengths to show it and the other side is more 'grey'. The Republic is comparable to many first world nations today. They are corrupt as all get out, but they still have a grey ideal of liberty and rights.
The Empire on the other hand is EVIL through and through. They conquer, they destroy, they consume. They commit genocide on large scales and are led by egotistical maniacs. There is also a racist undertone to them.
So neither side is really good, but the Republic is definitely closer to what 'good' could be called.