A lot of people justify neutering because it is a quick way of supposedly dealing with behavioural problems in animals. There are actually alternative ways of solving such problems which require nothing more then the pet carer's time: 

• In the wild, wolves have strict pecking orders within packs, with the Alpha male and female as "top dogs". Alpha wolves tend to act in a confident fashion as far as other pack members are concerned while not backing down to them. Therefore, humans can prevent behavioural problems arising in their dogs by acting in a similar fashion. (This, however, probably does not work with cats as they see humans as little more then servants). Simply remaining dominant over male animals, if not females as well, should stop them from suffering from sexual frustration due to your dominance keeping their sex hormone levels low (see the last paragraph on this page for details on why this should work).
• Neutering can also cause unwanted behavioural changes such as making males more aggressive or damaging their confidence while making them less brave. Females can also be made "clingy" by the operation (these side effects can last for a few days or for the rest of the animal's life). Both males and females may also become depressed for a short peroid just after being neutered). Also, neutering is far from guarenteed to have any real effect on behavioural problems (check out http://www.neutersol.com/TestosteroneFacts.htm for statistics concerning male dogs).
• Some scientists have stated that aggression in animals has nothing to do with hormones whatsoever (experiments involving monkeys show that hormone levels go up due to being involved in fighting, rather then being the cause of the fighting). Aggression towards humans is usually due to bad training or can be caused by abusing the animal. Behavioural therapy can help with most cases of aggression anyway, which means that neutering is unnecessary, and it is unlikely to have any effect on aggression towards humans (to prevent aggression occuring due to fear, you should introduce your pet to as many different animals and people as possible when the animal is still young).
• If the animal is neutered before s/he reaches puberty, it may be harder to train the animal (who may become stubborn) as estrogen and testosterone are essential for psychological maturity. 
• One effective way of curing behavioural problems is by using operant conditioning, which involves getting the animal to associate good behaviour with a reward, while associating undesireable behaviour with a punishment (eg.: you could give a dog who scent marks furniture a dog chew whenever he urinates in a desireable location, while telling him off when he urinates in the house). However, painful punishments can be counter-productive, so they should be limited to telling the animal off or squirting him or her with water when he or she misbehaves.  

• By using a “Freedom Fence” system, or something similar, it should be possible to keep cats from wandering off and getting injured (they do this by causing a static shock while making a noise whenever the animal goes near the property boundry). This means that you should save money in the long term on vet’s bills. It would be necessary to have cats sterilised, though, as Freedom Fences only affect animals wearing a collar which comes with the system.

• At least as far as dogs are concerned, females tend to dominate males, but, if the male has been castrated, any females who are living with him are likely to bully him even more, which suggests that females see neutered males as being wastes of space, or it could suggest that neutered males are less willing to stand up for themselves, which would provide evidence that the operation can decrease the confidance of male animals.

• Studies on monkeys show that dominant males have higher testosterone levels then recessive males, but, if the dominant monkeys are taken away, the testosterone levels of the recessive males go up, which suggests that dominance causes high levels of testosterone, rather then vice versa.