This is hard to answer. I personally don't think he is bad, but he is not good either. He is the product of his father who raised him to deal with life's situation in a wrongful manner. He has feelings and he sometimes tries to correct his mistakes, he is what I call "a very naughty kid".
He is envious, selfish, and wants to be above Harry Potter in every way, to please his father. In that sense you could say he is "bad" but he is certainly capable of re-shaping himself for the better.
He wants to be the hero, and admired, like Harry; yet he is frustrated about the fact that he can't be, because he doesn't know how... his upbringing again gets in the way.
He should atleast try to be good to Harry, because Dracos' had his butt saved a few times by him. Of course, their rivalry is natural, as one is a Gryffindor and one is a Slytherin.
He is a good kid deep down inside, but his actions make him appear to be evil. His actions, after all, were only acted upon, because he wishes to please his father, and his mother, as they are both death eaters. But in 'The Half Blood Prince', when he was about to carry out his duty, he studdered. He didn't want to do it. His line also gives away his true allegience. "I have to do it. If I don't.. They'll kill me..". Not to mention, that line was said in a studdered tone. And also, if you have seen the last one, when Lord Voldemort asked the young wizards to come forth, and join him, Dracos father and mother were calling Draco, to try and get him to come back to their side. He did, but he seemed as if he did not want to.