Ethics is fairly broad subject, but it mainly deals with questions of morality and codes of conduct that help guide our actions. When it comes to whether an action is deemed ethical, that depends a great deal on the underlying principles of the ethical system in question. Some, for example, take the outcome of an action to be the most important deciding factor, while others may take the action itself as the key determining factor.
In Buddhism, for example, the Buddha's distinction between skillful and unskillful actions seems like a middle way between, or possibly a synthesis of, Jeremy Bentham's teleological utilitarianism and Immanuel Kant's deontological categorical imperative. (That's not to say that Bentham and Kant represent two ends of a single ethical spectrum, only that the Buddha takes what Bentham and Kant stress and emphasis them together.) With the Buddha, just/skillful actions aren't simply judged to be just/skillful based upon their consequences, but also because there's something inherently and universally just/skillful about the actions themselves. In Buddhism, this would be due to the quality of the intentions behind the actions.
The underlying principles behind Buddhist ethics are kamma — the idea that certain actions produce pleasant, painful or neutral feelings/results — and the principle of ahimsa or harmlessness.
The basic premise behind kamma is that there's a cause and effect relationship between our actions and how they're experienced. As Thanissaro Bhikkhu puts it, "It's simply the fact of action—you do something unskillful, it's going to come back in an unpleasant way." In the same way, if you do something skillful, it's going to come back and be experienced in a pleasant way. In the Suttas, the Buddha defines kamma as intentional actions of body, speech and mind (AN 6.63) that have the potential to produce certain results, which, in turn, have the potential to produce pleasant, painful or neutral feelings (AN 4.235). The word itself simply means 'action.'
Pragmatically speaking, actions are deemed 'unskillful' (akusala) if they lead to to self-affliction, to the affliction of others or to both. Actions that don't lead to self-affliction, to the affliction of others or to both are deemed 'skillful' (kusala) (MN 61). Therefore, the distinction between skillful and unskillful actions is based upon how their results are experienced—not only by ourselves, but by others as well. (This emphasis on the consequential aspect of actions is similar to Jeremy Bentham's teleological utilitarianism, with John Stuart Mill's idea of higher and lower happiness being similar to the Buddha's distinction between long-term and short-term welfare and happiness.)
Psychologically speaking, however, the quality of the intentions behind the actions is what ultimately determines whether they're unskillful or skillful. (This aspect is closer to Kant's deontological categorical imperative when combined with the Buddhist principle of harmlessness.) Intentional actions rooted in greed, hatred or delusion produce painful mental feelings "like those of the beings in hell," while intentional actions rooted in non-greed, non-hatred and non-delusion produce the opposite ("like those of the Beautiful Black Devas"). Then there are acts rooted in both that bring mixed results "like those of human beings, some devas, and some beings in the lower realms" (AN 4.235). By bringing kamma to an end via the noble eightfold path, however, and eliminating the skillful/unskillful dichotomy altogether, the mind is said to become free from agitation, leaving only freedom (SN 36.31) and moral perfection behind (AN 9.7). Or as St. Maximus writes in Opuscula theologica et polemica (albeit from a Christian perspective), "A perfect nature has no need of choice, for it knows naturally what is good. Its freedom is based on this knowledge."
Essentially, Buddhist ethics focuses on the moral character of the individual, and revolves around seeing our desires for happiness and freedom from pain in all living creatures. If we don't respect that in them, how can we ever expect the same? This is especially true regarding human beings. Here I agree with the Buddha that, besides some rare and special cases, there's no one that's as dear to us as ourselves, that all beings essentially want to be happy in their own way (according to their specific capacities), and that it's a fairly decent and logical reason to desire their happiness as well as our own (SN 3.8).
The reason is simple. If our happiness comes at the expense of their happiness, they'll do everything in their power to upset that happiness. Conversely, if they were to infringe upon ours, wouldn't it follow that we'd do everything in our power to upset theirs? It seems like a vicious circle to me, and one of the ways to break this circle is an ethical framework that takes the happiness of others into consideration. This, in turn, can eventually lead to the development of things like compassion and generosity, which, when combined with other qualities and training methods, can ultimately transform a self-centred desire for happiness into the selfless achievement of happiness via insight into the inconstant (anicca), stressful (dukkha) and selfless (anatta) nature of phenomena.
Nevertheless, Buddhism is a type of 'religious individualism' in that the teachings on kamma focus on individual actions and their consequences, so ethics are more or less a personal matter that each individual must explore and develop on their own; although guidance is certainly advised.
The way I see it, Buddhist ethics aren't entirely black or white, i.e., they aren't seen in terms of ethical and unethical as much as skillful and unskillful. In Buddhism, all intentional actions are understood to have potential consequences, and actions that cause harm to others and/or ourselves are considered to be unskillful and something to be avoided. But the Buddha never condemns people merely for making unskillful choices or breaking the precepts; he simply urges them to learn from their mistakes and to make an effort to renounce their unskillful behaviour with the understanding that skillful behaviour leads to long-term welfare and happiness.
All in all, I find Buddhist ethics to be less judgmental and more forgiving than many other systems when it comes to making mistakes (read 'less rigid'), as well as ingenious and profoundly simple from a theoretical point of view. But more importantly, I find it to be practical and extremely effective when sincerely adopted and put into practice.