Paizo are running their annual RPG Superstar competition and it's reached round three - which this year is designing a monster. If you haven't stumbled across this, take a look. There is a lot of very creative work going on.
What's bothering me, in a mild way, is the recurring comment on some entires - "This isn't a monster, it's an NPC". I understand what is being said, I just don't think the border is that precise.
This chap ...
That kobold who surrendered and became a guide. Might have been a monster, but became an NPC. In Snaggletooth's case, an unexpectedly heroic one.
Clearly this isn't an issue each and every time. A gelatinous cube is going to tricky to turn into an NPC. Spawn of Dagon, swarms of bees, gibbering mouthers and numerous others are unlikely candidates as well. The bottom line, in the end, is whether the critter in question is capable of negotiation. That's where the boundaries get blurred.
It depends on the adventure and the players as well, of course. Some days you just want to go bash heads and that's fine. I just like keeping my options open I suppose.
On the subject of the competition above, I'd hate to think of anyone losing out because they've created a monster that can also be an NPC.