I like to think of Two Face as the two extremes to Batman's personality. On one side hes this really good squeaky clean D.A. unwilling to bend any rules to get the job done. He had a little accident and the polar opposite came out, willing to do whatever is necessary to get what he believes to be justice. Two face is black and white, good and evil, Batman is the gray in between willing to bend the rules but not break them completely.
I think he has the potential to be a more compelling character than the Joker given a good enough writer and a good story. I think the Joker is just an easier character to write interesting stories about, nothing is off limits with him, whereas Two Face is morally conflicted, he shouldn't be a mob boss or a thug. Which is partly why I'm so looking forward to his portrayal in TDK, it seems like they're making him into a tragic hero which is what I think he works best as.