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From what I remember, she was the Minister of the Orastery, one of Windurst’s five ministries of magic (the one responsible for training new mages in the arcane arts of Black, White and Red magic), but somehow lost her position. It’s stated also that although she’s a powerful mage (and constantly boasts this fact in game), she had a tendency to lose control of her spells, which is probably the reason for her demotion in Windurst’s theocracy.
That and she also has a real vindictive streak – for instance there’s a funny series of optional quests in FFXI involving her where she places a curse on a secret admirer and then has to cope with the problems it causes.
There’s also a new add-on pack for FFXI coming soon that apparently features her in a central story role (called, appropriately enough, A Shantotto Ascension – Her Empire Born, A Legend Torn, but nothing is really known about it at the moment.
However, I’m pretty sure her appearance in FF Dissidia isn’t because she’s good or evil, but because she’s neutral – morally ambiguous. Although it could also just be considered a plug for the previous mentioned FFXI add-on pack. 😉