In my opinion, Iago is not mad, not the "devil incarnate" and completly rational. Iago is motivated by the all-too-human propensity for envy. He is envious of Othello's station in life and all that that positon brings: political power, money, even beautiful women.
Iago is far too organized to be mad, his schemes too well planned. He is the one to inform Othello's father, the Duke, of Othello and Desdemona's elopement, knowing full well the havoc the news will create. He is there, behind the scenes, til his (and Othello's) bitter end.
Other critics have called Iago "a machiavellian villan without conscience," and indeed, Shakepeare describes Iago in the play as a "viper" and an "inhuman dog." And he does seem to be so.
However, what continues to make Shakespeare's plays so universally appealing is that their themes are still easily identifiable. Yes, evil exists in the world, often cold, calculated evil. It seems that backstabbing and political manuevering is nothing new. Just look at any number of headlines today.