I loved Callisto, particularly because she was the only villian who could stand toe to toe with Xena and not buckle like a infatuated war god. I agree that it was the actress who portrayed her so well that gave Callisto her character depth and not the writers. Yeah, Callisto's redepmtion was not among my favorite parts of the series, but I think that by then the whole arc was catering to something that was just too big to pull off well with that one scene.

If there was one itty bitty thing I would have changed about Callisto, it would have been the constant and extremely apparent psychological imbalance. I think that part of Callisto's character was wayyy overdone. Imagine how much more terrifying Callisto would have been if it was harder to predict when her insanity would manifest? XD