text:
Doing evil knowingly and unknowingly
In the Milindapanha, Nagasena points out to king Milinda that doing evil knowingly accrues lesser demerit than doing evil unknowingly. Does the Buddha make the same statement anywhere in the Suttas?

The king asked: "Venerable Nagasena, for whom is the greater demerit, one who knowingly does evil, or one who does evil unknowingly?"
The elder replied: "Indeed, your majesty, for him who does evil not knowing is the greater demerit."
"In that case, venerable Nagasena, would we doubly punish one who is our prince or king's chief minister who not knowing does evil?"
"What do you think, your majesty, who would get burned more, one who knowing picks up a hot iron ball, ablaze and glowing, or one who not knowing picks it up?"
"Indeed, venerable sir, he who not knowing picks it up would get burned more."
"Indeed, your majesty, in the same way the greater demerit is for him who does evil not knowing."
"You are clever, venerable Nagasena."

Milindapanha - Access to Insight
My interpretation of this is not about unintended action vs intended action as one of the answers suggests. Instead I see it as comparing intended action with the view that the action is unwholesome vs intended action with the view that the action is wholesome. It's not about intending harm vs not intending harm, instead it's about intending harm knowing that causing harm is bad vs intending harm not knowing that causing harm is bad.

Can you add a reference (e.g. add a hyperlink, or say which chapter number you are talking about) or a quote from the Milinda Panha?

Also do you only want an answer from the Suttas: what about from the Dhammapada for example, or the Vinaya?

@ChrisW added a reference and a quote. I guess any source attributed to the Buddha is acceptable.

Ahhh I see. The one doing evil at least "knows" or sees that they are doing evil, they know they can turn the other way and go in higher directions - they are awakened to the fact of the "evil". But the person who does evil not knowing, is still unawakened, half asleep - they are blind. Coyote

The source is Miln III,7,8 [84].
The other day, I happened to read a discussion of this passage in "Development in the Early Buddhist Concept of Kamma/Karma" by James Paul McDermott (page 113-114).
Based on what I have read, I do not believe that there is any specific quote in the Suttas / Vinaya that specifically supports this passage. The Suttas (AN 6.63) equate kamma with volition / intention and as McDermott explains, this was developed in the Abhidhamma (particularly the Kathāvatthu), further developed in Milindapañha and even further developed in the Abhidharmakośa. Of course, the commentaries developed the concept of kamma to a new level again (this was beyond the scope of McDermott's book).
One has to be careful with interpreting this parable of getting burned by the hot iron. The point is that a unskillful act done with wrong view will generate more weighty kamma... somebody who knows that the unskillful act is wrong will have less volition / intention when performing the unskillful act as compared to another person who sees absolutely nothing wrong with the unskillful act (i.e. accompanied by wrong view).
@Jayarava, I have admired some of your writings / posts. Thanks for prompting me to look deeper at this passage (I love to learn). Here is the passage in Pāḷi:

Rājā āha ‘‘bhante nāgasena, yo jānanto pāpakammaṃ karoti, yo ajānanto pāpakammaṃ karoti, kassa bahutaraṃ apuñña’’nti? Thero āha ‘‘yo kho, mahārāja, ajānanto pāpakammaṃ karoti, tassa bahutaraṃ apuñña’’nti. ‘‘Tena hi, bhante nāgasena, yo amhākaṃ rājaputto vā rājamahāmatto vā ajānanto pāpakammaṃ karoti, taṃ mayaṃ diguṇaṃ daṇḍemā’’ti? ‘‘Taṃ kiṃ maññasi, mahārāja, tattaṃ ayoguḷaṃ ādittaṃ sampajjalitaṃ sajotibhūtaṃ eko jānanto gaṇheyya, eko ajānanto gaṇheyya, katamo [kassa (ka.)] balavataraṃ ḍayheyyā’’ti. ‘‘Yo kho, bhante, ajānanto gaṇheyya, so [tassa (pī. ka.)] balavataraṃ ḍayheyyā’’ti. ‘‘Evameva kho, mahārāja, yo ajānanto pāpakammaṃ karoti, tassa bahutaraṃ apuñña’’nti.

I believe that the key word is "ajānanto". In the translation above, it is rendered as "unknowingly". T.W. Rhys Davids translates this as "inadvertently". Bhikkhu Pesala translates this as "unconsciously". PED uses translations such as "unaware" and "unsuspecting".
I do not think "ajānanto" is equivalent to "ignorance" (delusion / moha). "Ajānanto" seems to be closer to "unwise attention", not seeing things as they truly are. For this reason, I think wrong view is a better handling, even though "micchādiṭṭhi" is not used in the text. @Jayarava, your knowledge of Pāḷi is far superior to mine, so I would be very willing to be corrected.
Oops, I just read your answer below, so let me add more...
I am an Abhidhamma teacher and this certainly colours my world view :-) Let me put an Abhidhamma spin on this to see if it helps. The Milindapañha was written after the Abhidhamma, so it is possible that in this passage, Nāgasena is attempting to clarify a doubt from the Abhidhamma.
Kamma comes from intention. The ethical quality of the kamma created comes from the roots (attachment / aversion / delusion for unwholesome, non-attachment / non-aversion / understanding for wholesome).
I do not believe that this passage from the Milindapañha is talking about the ethical quality of the kamma created.
I do believe that this passage from the Milindapañha is talking about the weightiness / intensity of the kamma created... and this is a different issue. The weightiness / intensity of the kamma created is a question of strength of volition.
In the case of unwholesome kamma-creating mental states, the strength of volition can depend on pleasant / neutral feeling (pleasant feeling contributes to stronger volition), prompted / spontaneous (spontaneous contributes to stronger volition) and associated / disassociated with wrong view (associated with wrong view contributes to stronger volition). I believe that this passage from the Milindapañha is talking about the third factor; "associated / disassociated with wrong view".

indeed. also someone who doesn't know that their actions are wrong will continue to keep doing the same in the future whereas someone who knowingly makes a mistake is much more likely to change how they act in the future.

For example on the subject of not making a habit of it, there's this quote from a monk, who claims that he would tell a lie in order to save a life (but also not "whenever it is convenient" and only "in extreme cases").

I think the lesser demerit in the second case may have more to do with the fact that the person is significantly more likely to change their future behavior knowing that what they are doing is unwholesome instead of having to do with less volition/intention. Many criminals believe that their actions are justified, for example Al Capone apparently saw himself as a public benefactor instead of a criminal. This ability people have to rationalize away their actions is where the danger lies (papañca).

The impact of wrong view on the weightiness of unwholesome kamma produced (or alternatively the impact of understanding on the weightiness of wholesome kamma produced) is a bit different topic than habits. A few minutes ago, I submitted a long answer regarding habits to a question, "Are good deeds superficial".

@RobM Is it talking about wrong view? It's perfectly straight forward to say "micchādiṭṭhi" in Pāḷi. Do you know of other passages where ajānanto is used to mean micchādiṭṭhi that might back up this assertion? An unwholesome deed performed with understanding (that it is unwholesome) ought to produce the weightier karma than a deed performed without that understanding (since the intention is not to cause harm), but here the text is saying the opposite of that!

I have added a note at the end of my answer.

With regard to karma one of the most cited Pāli passages is:

Cetanāhaṃ bhakkhave kammaṃ vadāmi - AN 6.63
Intention, monks, is what I call action.

In other words, only intentional actions are karma. On the other hand Jains considered that all actions whatever were karmic. They developed the idea that inactivity was the best religious practice, taking it as far as starving themselves to death.
This passage from Miln seems to contradict this important principle. It is very curious. I will have to give this a good deal more thought.
And I think it's fair to say that just because someone can come up with the plausible reading of this text by changing the meaning of the words somewhat, doesn't mean that this is what was intended. A more sound procedure is to exhaust the possibilities of the text itself, then look for a traditional commentary, before starting to make ad hoc assumptions that simply fit a desired interpretation. One always has to allow that the text simply does not make sense.
~
In checking the Pāḷi passage (Miln 84) (in the Burmese 6th council Ed.) I had to translate it anyway, So I'll include my translation for reference. If there are any supplementary questions about the translation, leave a comment, and I'll edit this answer to try to explain.

Jānantājānantapāpakaraṇapañho
The question on doing evil knowingly or unknowingly.
Rājā āha "bhante nāgasena, yo jānanto pāpakammaṃ karoti, yo ajānanto pāpakammaṃ karoti, kassa bahutaraṃ apuññan" ti?
  The King said, "Bhante Nāgasena, he who does an evil action (pāpakamma) knowingly (jānanto), he who does an evil action unknowingly (ajānanto); which has the greater demerit (apuñña)."
Thero āha "yo kho, mahārāja, ajānanto pāpakammaṃ karoti, tassa bahutaraṃ apuññan" ti.
  The Elder said, "Majesty, he who does an evil action unknowingly, he has the greater demerit"
"Tena hi, bhante nāgasena, yo amhākaṃ rājaputto vā rājamahāmatto vā ajānanto pāpakammaṃ karoti, taṃ mayaṃ diguṇaṃ daṇḍemā" ti?
  "By this [reasoning], Bhante Nāgasena, should we punish our royal son or royal minister twofold (diguṇa) for doing an evil action unknowingly?"
"Taṃ kiṃ maññasi, mahārāja, tattaṃ ayoguḷaṃ ādittaṃ sampajjalitaṃ sajotibhūtaṃ eko jānanto gaṇheyya, eko ajānanto gaṇheyya, katamo balavataraṃ ḍayheyyā" ti.
  "What do you think, Majesty, if someone were to knowingly grasp a glowing iron ball, aflame, burning, or to unknowingly grasp it, who would receive the worse burn?"
Yo kho, bhante, ajānanto gaṇheyya, so [tassa] balavataraṃ ḍayheyyā" ti.
  "Bhante, the one who grasped it unknowingly, he would receive the worst burn."
"Evameva kho, mahārāja, yo ajānanto pāpakammaṃ karoti, tassa bahutaraṃ apuññan" ti.
  "Just so, Majesty. he who does an evil action unknowingly, makes the most demerit."
"Kallosi, bhante nāgasenā" ti.
  "You are skilled, Bhante Nāgasena".

There is a lot here to digest. If Nāgasena is correct, why does Milinda say he should punish members of the royal court twofold (diguṇa)? I don't see the logic of this.
Does the analogy even work? Is it true that grasping a burning iron ball on purpose would mean one would be burned less? Who would grasp a burning hot iron ball on purpose anyway?
This is one of the most bizarre pieces of Pāḷi prose I've ever looked at!
I don't see how one can separate intention and understanding. Jānanto is just a very broad word for "knowing". So we must interpret yo ajānanto pāpakammaṃ karoti as "does an evil action without knowing that he does evil" and yo jānanto pāpakammaṃ karoti "does an evil action knowing that he does evil". The one who acts with knowing clearly must incur the greater consequences, but this text reverses the natural order. On face value it simply does not make sense.
It has been suggested by @RobM that this passage is referring not to the ethical quality of the action (and therefore of the vipāka it will generate), but to weightiness of the kamma. In fact I do not see any meaningful separation of these, since it is the ethical quality of an action that determines how weighty it is. Furthermore the passage itself is talking about who accrues the most apuñña or demerit. How can one separate puñña/apuñña from the "ethical quality of the action that generates it? An action generates puñña/apuñña in precise proportion to the kusala/akusala of the intention (cetanā) behind it. What's more the passage does not contain any word implying weightiness (garu, garutara, garutā etc). So although @RobM has produced a reading that is consistent with his understanding (and therefore pleasing), it is unrelated to the words he is attempting to interpret. This is an unsound exegetical methodology.
The exegetical strategy of all those answers so far which claim to understand this passage (which I do not) is that the words jānanto/ajānanto mean something other than what they mean. Either ajānanto means micchādiṭṭhi or it means garutā (weightiness) or something else that makes the passage make simple sense. In order to establish such a reading the person proposing it would need to show that this esoteric substitution was a regular feature of either the Milindapañha or the Pāḷi literature as a whole. One of the attractions of the Pāḷi literature is that on the whole it is quite straightforward. Metaphors and similes are occasionally reified by later tradition, but they stand out in the texts. So, on the face of it, an esoteric reading, where the text says one thing but means another would require some strong evidential support in the form of many quotations of similar substitutions. I don't see any evidence to date. So far I have not understood this text, but I don't believe that anyone else has either. "Don't know" must always be a possible, if unsatisfactory solution to any problem. And if one does not know then there is no shame in saying so. To over-ride unknowing and superimpose something familiar on a text to force it into a familiar pattern is not a good practice. At best it is a form of self-deception.

There is no contradiction. Let's consider killing someone as an example. (1) There is the case where someone kills another accidentally (intention to kill is absent). (2) There is the case where someone kills another (intention to kill is present) believing that killing is not evil/unwholesome. (3) There is the case where someone kills another (intention to kill is present) believing that killing is evil/unwholesome. This passage from Miln has nothing to do with (1), it's only comparing (2) and (3) but the word "unknowing" that the translator has chosen makes this somewhat ambiguous.

Whereas "Cetanāhaṃ bhakkhave kammaṃ vadāmi" is concerned with (1) vs (2)/(3).

does evil unknowingly sounds like (1) to me. The word is ajānanto a present participle from √jñā which must mean exactly "unknowingly" - or perhaps "without understanding". So the problem is certainly not with the translation. Nor can the Pāḷi be interpreted in the way you suggest.

doesn't "without understanding" support my interpretation? as in acting intentionally but without understanding the immorality of the action?

I've edited my answer at the end to respond to this.

I agree the analogy is not the best which is why I was looking for an alternative analogy / supporting reference from the Suttas. Perhaps the person who knows that the iron ball is hot would take some precautions when picking it up maybe like wearing gloves that would lessen the burn haha

I have edited my answer to hopefully clarify my understanding

For more than 15 years, I have been using analogies very similar to this (though I have never quoted this passage from Milindapañha) to explain why a mental state associated with wrong view creates weightier kamma than a mental state disassociated from wrong view. When I read this passage in Milindapañha, I immediately jumped to the conclusion that it was making the same point. I did not check the Pāḷi to see if this assumption was supported by the actual words used. @Jayarava, I would be keen to explore this together with you (I have never learned anything from a person who agreed with me).

@Jayarava, I think that the first topic of discussion could be the translation of the word, "ajānanto". Various translators have used terms such as "unknowingly", "inadvertently", "unconsciously", "unaware" and "unsuspecting". Each of these English words carries some baggage, but if we consider them as a set, I feel comfortable that we have an acceptable understanding of "ajānanto". Are you comfortable with this?

As I understand it, comments on an article are not designed for extensive discussions of answers. So I'm reluctant to begin what will almost certainly be a protracted discussion in this format.

You're right about comments but fyi you are allowed to discuss whatever and as much as you want to, in the chat rooms (e.g. use the existing general chat room, or create a new one for a specific conversation). There are virtually no rules about the format or content of what's in chat rooms (except, you know, a modicum of politeness).

@ChrisW Rob and I did something similar - an offline discussion. But thanks.

Ven. Pesala's translation has a footnote to clarify the meaning:

"All wrong-doing is rooted in ignorance, so one who does wrong knowingly will feel remorse and correct himself sooner than one who is deluded (Editor’s Note)."

So based on his note, "knowingly" here means knowing that the unwholesome deed does create unwholesome results.

What is Pesala's authority for this interpretation?

"authority" might not be the word to use. But insight from a venerable monk who has written many books on Buddhism (ref: http://www.softerviews.org/AIM/pesala.html ) is worth paying attention to..

I judge all scholarship on it's merits, not on the reputation of its author. Plenty of rubbish books are published about Buddhism! And I certainly do not venerate bhikkhus as a matter of course.  In my experience bhikkhus, with one or two notable exceptions (e.g. Anālayo) make poor scholars as their work is almost inevitably tainted by strong confirmation bias. They are far too committed to the articles of Buddhist faith to be objective. So my question stands. What is his authority for this interpretation?

Again, I don't think "authority" is the word to use since there're many interpretations for the story. But if you insist on using this word, then what is YOUR authority to this interpretation, and more specifically, why do people have to listen to yours instead of Ven. Pesala's?

AuthorityI have not offered an interpretation so I'm sure I don't know what you mean.

Authority is exactly the word. I have not offered an interpretation so I'm sure I don't know what you mean. Also I don't expect people to take my opinions on face value, I expect them to evaluate my words critically. I am not an authority, to back up my assertions (if I make any) I generally refer people to a traditional interpretation, a respected journal article, or a book that is generally acknowledged to be accurate - an authority.

You did offer a lengthy interpretation in the post of yours above. And I simply provided an alternative interpretation from Ven. Pesala as another interpretation. Since you like the word authority so much, I repeat the question: what authority do you have over Ven. Pesala to make people listen to you instead of him?

See Dhammapada 5.69:

So long as evil deed has yet to ripen, the fool mistakes it for honey. But [only] when that deed ripens, the fool comes to grief.

-- the implied contrast here is that the wise recognizes his own misconduct as misconduct before it ripens and "drops the iron ball" before it burns.
My commentary: the wise may not know, and can make mistakes - but he understands the limits of his knowledge and acts cautiously, in little steps, verifying his theory from received feedback and adjusting his model accordingly. The fool is assured of his (incorrect) knowledge and is attached to it. He does not actively look out for feedback and does not adjust his understanding and action. The fool is attached to his incorrect understanding.
This is how the fool is setup for suffering: because of his attachment to incorrect understanding which mismatches the reality and provides an incorrect basis for decision-making. The wise adjusts his model all the time to better match the reality, even as reality changes:
Imagine two Roombas (robotic vacuum cleaners), both with incorrect map of the house. One Roomba updates its internal map as it goes around and bumps into things. Another Roomba keeps going based on a wrong map. Which Roomba will clean the house better and which will likely get stuck? "For whom is the greater demerit?"

People at large think that not knowing is an excuse and lightens the effects of wrongs. Causing killing by "accident" or thought it would not matter? How about this?
The teaching does not talk about the whole vipaka (by of kamma) but of direct suffering from an action. Of course doing bad knowingly is a heavier bad kamma, good householder. "Knowing" the danger of stealing (in frames of orginary expectations) , one does not get easy caught in this existance, but the effect, kammic, is heavier. So good to devide it, and that suffering is caused by not knowing (ignorance, avijja), is present in 50 % of the Suttas, and core teaching.
Maybe the reflection as support helps good householder to understand the matter better: Unwholesome done knowingly and unknowingly.
Ignoring this, knowingly, is sure not so hot assumed, without knowing (yet) sure painful, when touched.
(Note: this is not given for trade, exchange, stacks that binds to the world, either knowingly or unknowingly, but for liberation from this wheel)

Here is the previous section

The king said: 'Which, Nâgasena, is there more of, merit or demerit?'
'Merit.'
'But why?'
'He who does wrong, O king, comes to feel remorse, and acknowledges his evil-doing. So demerit does not increase. But he who does well feels no remorse, and feeling no remorse gladness will
  spring up within him, and joy will arise to him thus gladdened, and so rejoicing all his frame will be at peace, and being thus at peace he will experience a blissful feeling of content, and in that bliss his heart will be at rest, and he whose heart is thus at rest knows things as they really are 1. For that reason merit increases. A man, for example, though his hands and feet are cut off, if he gave to the Blessed One merely a handful of lotuses, would not enter purgatory for ninety-one Kalpas. That is why I said, O king, that there is more merit than demerit.'
'Very good, Nâgasena!'

I think that confirms Andrei's explanation -- i.e. that the context is that when you know you've done evil then you feel remorse and stop doing it.


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Why are "Fear and Shame" listed among the beautiful cetasikas?
I was wondering how the mental factors of Fear and Shame should be understood. Normally I would understand them both as being unwholesome but I guess in Abhidhamma-perspective they have a different meaning.
How should they be understood according to the Abhidhamma?
They are both listed as belonging to the group of Beautiful or Moral cetasikas.

It's a translation issue. The Pali terms are Hiri and Ottappa, and they are hard to translate into English because they have no one-word equivalents.
Hiri refers to the feeling of not wanting to do a bad deed because you know the deed itself is bad, and Ottappa refers to the feeling of not wanting to do an evil deed because you know that the consequences of it are bad.
They definitely do not mean what is normally meant by the English words fear and shame. Many suttas speak of fear as unwholesome, and shame in the sense of remorse is mentioned as unwholesome in other Buddhist writings.
For this reason, the translator Ajahn Thanissaro prefers to translate these terms as conscience and concern.
The Ven. Bhikkhu Bodhi wrote a good article on these two terms called The Guardians of the World. Here's a very good excerpt:

While moral shame and fear of wrongdoing are united in the common task
of protecting the mind from moral defilement, they differ in their
individual characteristics and modes of operation. Hiri, the sense of
shame, has an internal reference; it is rooted in self-respect and
induces us to shrink from wrongdoing out of a feeling of personal
honor. Ottappa, fear of wrongdoing, has an external orientation. It is
the voice of conscience that warns us of the dire consequences of
moral transgression: blame and punishment by others, the painful
kammic results of evil deeds, the impediment to our desire for
liberation from suffering. Acariya Buddhaghosa illustrates the
difference between the two with the simile of an iron rod smeared with
excrement at one end and heated to a glow at the other end: hiri is
like one's disgust at grabbing the rod in the place where it is
smeared with excrement, ottappa is like one's fear of grabbing it in
the place where it is red hot.

Fear and shame I believe are referring to the words hiri and ottappa. Hiri-ottappa is not fear and shame in the ordinary sense of these words but it refers to something like the self-correcting concern that a stream enterer has even for making minor transgressions that could hinder progress towards Nibbana. This concern comes through understanding that these actions really are unskillful and having seen a glimpse of Nibbana and having unshakable confidence in the Buddha makes this individual shameful of committing even minor acts that are unskillful. Similar to how a minor blemish on an otherwise dirty piece of cloth doesn't really make a difference, a stream enterer on the other hand sees his/her weaknesses as a blemish on a pure white cloth that needs to be erased. Hiri-otappa is one of the reasons why a stream enterer is on a path of continual improvement that inevitably leads to Nibbana.

In addition to the answers above it might help to reflect on the opposites of Hiri and Ottappa (Ahirika and Anottappa). Just as Hiri and Ottappa arise in all wholesome mental states, Ahirika and Anottappa arise in all unwholesome states of mind.
Ahirika (shamelessness / immodesty) has a characteristic of “no disgust over misconduct”, a function of “doing evil without shame”, a manifestation of “not shrinking away from evil” and a proximate cause of “lack of respect for self”. Just as a pig is not ashamed to roll in sewage, the mind is not disgusted with unwholesome actions, speech or thought. The Buddha said to his son, “Of anyone for whom there is no shame at intentional lying; of him I say that there is no evil he cannot do. ‘I will not speak a lie, even for fun’ – this is how you must train yourself”. In other words, there is no room for “white lies”. To check if there is Shamelessness in the mind, ask yourself, “Is this the kind of Mental State that could arise in an Arahat?” or ask yourself, “Would I be proud if my thought were reported as a headline in tomorrow’s newspaper?”
Anottappa (recklessness / lack of moral dread) has a characteristic of “no dread over misconduct”, a function of “doing evil without dread”, a manifestation of “not shrinking away from evil” and a proximate cause of “lack of respect for others”. Just as a moth gets attracted by fire and is burned, Recklessness is unaware of consequences, gets attracted by the unwholesome and plunges into the danger zone. To check if there is Recklessness in the mind, ask yourself, “Is this Mental State going to be the wind under my wings to lift me up, or the weight around my neck to drag me down?” or ask yourself, “What kind of kamma is this Mental State creating?”

In the Abhidhamma, regret and remorse over the past is considered an unwholesome mental factor.

Worry (kukkucca) is remorse, brooding, and repenting over evil acts
done in the past or good acts left undone.

The following theme for reflection from AN 5.57 (quoted below) can prevent the arising of unarisen unwholesome states. It encourages shame of evil (hiri) and fear of evil (otappa), which are mentioned as beautiful mental factors in the Abhidhamma.
So, remorse and regret over the past is unwholesome. But shame of evil and fear of evil, or basically moral shame (hiri) and fear of wrongdoing (otappa), for the future, is wholesome.

“And for the sake of what benefit should a woman or a man, a
householder or one gone forth, often reflect thus: ‘I am the owner of
my kamma, the heir of my kamma; I have kamma as my origin, kamma as my
relative, kamma as my resort; I will be the heir of whatever kamma,
good or bad, that I do’? People engage in misconduct by body, speech,
and mind. But when one often reflects upon this theme, such misconduct
is either completely abandoned or diminished. It is for the sake of
this benefit that a woman or a man, a householder or one gone forth,
should often reflect thus: ‘I am the owner of my kamma, the heir of my
kamma; I have kamma as my origin, kamma as my relative, kamma as my
resort; I will be the heir of whatever kamma, good or bad, that I do.’
AN 5.57

And from Iti 42:

"Bhikkhus, these two bright principles protect the world. What are the
two? Shame and fear of wrongdoing. If, bhikkhus, these two bright
principles did not protect the world, there would not be discerned
respect for mother or maternal aunt or maternal uncle's wife or a
teacher's wife or the wives of other honored persons, and the world
would have fallen into promiscuity, as with goats, sheep, chickens,
pigs, dogs, and jackals. But as these two bright principles protect
the world, there is discerned respect for mother... and the wives of
other honored persons."
Those in whom shame and fear of wrong
Are not consistently found
Have deviated from the bright root
And are led back to birth and death.
But those in whom shame and fear of wrong
Are consistently ever present,
Peaceful, mature in the holy life,
They put an end to renewal of being.
Iti 42

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How can the theory of emptiness be true and yet the self still transmigrates and takes rebirth?
The Theory of "Emptiness" is the concept that all phenomenon are empty of inherent existence. Something has the illusion of existence when the right causes and conditions arise. Example: there is no inherently existing chicken soup. You only get chicken soup when you put together a dead chicken, hot water. Veggies etc. in this theory, you illusory sense of self comes from the right causes and conditions, parents, a body, a brain etc. following this logic, upon death, the self should simply cease to exist because that which made you a self has dissolved and since you do not inherently exist you should just vanish, and yet the Buddha is clear we take rebirth. This is illogical and makes no sense. Perhaps this is why the Buddha never taught a theory of emptiness. This idea is nowhere in the entire Pali Canon.

possible duplicate of If there is no soul, how can there be rebirth?

Emptiness is most certainly in the Pali Canon, if you search accesstoinsight for "emptiness" you get an authoritative result: http://www.accesstoinsight.org/tipitaka/mn/mn.121.than.html

@Andrei Volkov I don't mind answering duplicate questions. Why can't we group question's that are possible duplicates together, this might give us subtler understanding of the topic, besides isn't it good for the mind to hear these things over and over again like in The Tipitaka? Also, the answers aren't duplicates are they?

@Uilium Why are some questions marked as duplicate?. If it's an exact duplicate (the question is exact, not really the wording), it's better to have only one so the answers are not spread through many same-questions.  But the general consensus I think is to be careful to not close questions that look the same, but aren't.

@atman "Perhaps this is why the Buddha never taught a theory of emptiness. This idea is nowhere in the entire Pali Canon." -- I'm a little confused by that statement. For a short summary of how anatta (aka "emptiness") is present in the canon and how the Buddha refuted doctrines of atman, see Was the doctrine of 'Anatta', accepted as doctrine by modern Buddhism, actually taught by the Buddha?

I would like to go on record that I think this question should remain open. Although at first glance it appears to be a duplicate, this question raises many much more subtle questions (such as the distinctive meaning of emptiness) and also the questioner has raised issues in their answer that are significantly different than such a question (i.e. the very nature of what the teaching of Anatta negates.)

@Uilium Why can't we group question's that are possible duplicates together Posting a link to another question adds it to the "Linked" section over there --> in the right-hand sidebar (above the "Related" section). A reason for not having truly-duplicate questions is to avoid posting truly-duplicate (i.e. copy-and-pasted) answers; another reason is that it's easier to read several answers if they're under one question than if they're under more than one question. OTOH we can aim to have different answers if the new question is nearly duplicate but actually slightly different.

@atman, Yuttadhammo Bikkhu gave a satisfying answer already. However, since you seem to suggest that emptiness as the absence of true existence is a Mahayana fabrication, would you like me to answer from 'a Mahayana Tenet' perspective?

Not all forms of Buddhism define emptiness in the way you describe; in Theravada Buddhism, for example, emptiness mainly means "empty of self":

“katamā cāvuso, suññatā cetovimutti”?
“idhāvuso, bhikkhu araññagato vā rukkhamūlagato vā suññāgāragato vā iti paṭisañcikkhati — ‘suññamidaṃ attena vā attaniyena vā’ti. ayaṃ vuccatāvuso, suññatā cetovimutti”.
"And what, friend, is liberation of mind through emptiness?"
"Here, friend, a bhikkhu, gone to the forest or gone to the root of a tree or gone to an empty dwelling reflects thus: 'empty is this of self or what belongs to self.' This one calls, friend, liberation of mind through emptiness."
-- MN 43

Being empty of self is different from not existing; it simply means that, from the point of view of experience, that which comes into existence does so from non-existence, and subsequently returns to non-existence; it has no existence outside of the single moment:

“aniccā vata saṅkhārā, uppādavayadhammino.
  uppajjitvā nirujjhanti, tesaṃ vūpasamo sukho”ti.
"Impermanent indeed are formations, of a nature to arise and fall.
  Having arisen, they cease, their tranquillizing is happiness."
-- DN 16
“yaṃ kiñci samudayadhammaṃ sabbaṃ taṃ nirodhadhamman”ti.
"Whatever is of a nature to arise, all of that is of a nature to cease."
-- DN 3
yasmā ca kho, ānanda, suññaṃ attena vā attaniyena vā tasmā suñño lokoti vuccati.
Because it is, Ananda, empty by way of self or what belongs to self, therefore 'the world is empty' is said.
--SN 35.68

There is only one example in Theravada Buddhism that I know of that is cited as support for the idea of emptiness being related to non-existence - in the Patisambhidamagga:

katamaṃ vipariṇāmasuññaṃ? jātaṃ rūpaṃ sabhāvena suññaṃ.
What is emptiness due to change? Born form is empty by way of intrinsic existence.
-- Paṭis. XX.5

The commentary to this passage refutes the idea that this refers to non-existence, however:

'Void of individual essense': here sabhāva is sayaṃ bhāvo; arising of itself is the meaning. Or sabhāva is sako bhāvo; own arising. Because of existence in dependence on conditions there is in it no essence by itself or essence of its own, thus it is "void of individual essence".
...
But if someone should say: "Own essence is individual essence; it is void of that individual essence. ... Because of the non-existence of any idea whatever it is the non-existence of materiality that is expressed by the words 'born materiality is void of individual essence.'" It should be argued thus: that being so, the words 'born materiality' would be contradicted; for what is devoid of arising is not called 'born'. ... And the word 'void' for what is non-existent contradicts the Blessed One's use of it above for the 'world' and also the words of the books of logic and linguistics; and it contradicts many logical arguments.
-- Path of Discrimination, p. 362 (Ñāṇamoli, trans)

So, while to say that "the Buddha never taught a theory of emptiness. This idea is nowhere in the entire Pali Canon." is clearly false (and should really be removed from your question), there are ways of understanding emptiness that don't contradict existence.
Further, the Buddha taught non-self; he didn't precisely teach "rebirth" - he never actually used a word, that I know of, that implies such an idea. He taught dependent origination; that mental formations lead to further becoming. It is pretty clear from reading the earlier texts (e.g. those cited above) that experiences arise and cease, being replaced by new experiences. This occurs even at the moment of physical death, hence "rebirth", or more accurately "birth".
In summary, emptiness can be understood to refer to absence of self (i.e. something eternal or immutable) and rebirth isn't really a Buddhist concept. Birth comes about because of mind states in one existence leading to future mind states in another existence - the separation between existences is merely conventional.

Bhante, can "Born form is empty by way of intrinsic existence" mean that which comes into existence doesn't stay the same even between rising and falling? :
Tin' imani bhikkhave sankhatalakkhanani Katamani tini uppado
pannayati, vayo pannayati, thitassa annathattam pannayati

@SankhaKulathantille I don't know what "stay the same" could mean in the instance of a single moment of existence. It has no time to change, apart from disappearing again.

For example Bhante, 1 Rupa kalapa is said to last for a period of 17 thought moments. Could it mean that the Rupa doesn't stay the same even during that time.

The teaching that all things composed of parts are without self, but are mere names and labels designated in dependence on their parts, is something that most definitely is taught in the Pali canon, quite explicitly in the Vajira Sutta with the analogy of the analysis of the Chariot.
The reason this doesn't contradict rebirth is that when a person dies, their final consciousnesses cause the arising of a new consciousness in dependence on a new body, and this new mind and body can be conventionally called a self, and there is a causal relationship between the two.

Rebirth
First of all the idea of emptiness doesn't really apply to chicken soup. This is a widespread misinterpretation. It principally applies to experiences. The basic idea is that there is a sense-object (arambaṇa) and a sense-faculty (indriya) and when the two come together in the presence of sense-cognition (vijñāna) then this produces an experience (vedanā), which then gives rise to a whole range of speculative mental processes (prapañca).
Note that vedanā comes from a verbal root √vid, meaning "to know, to discover". We have vedanā when we know we are experiencing something. So dependent arising is describing, not the arising of chicken soup, but the arising of a conscious experience. And of course experience is characterised by impermanence (anitya), disappointment (duḥkha), and lack of substance (anātman).
In this theory, the experience of being a self happens in just the same way. The first-person perspective and the sense of being someone who is having an experience, are just more kinds of experience. The kind that happen then the arambaṇa is a mental process and the indriya is the mental faculty and there is mental cognition.
Any arguments over whether the experience exists (asti) or does not exist (nāsti) are kind of meaningless. When you eat a peach, does the taste of peach exist? Or not? Or is the language of "being" inappropriate here? Early Buddhist texts argue that asti and nāsti don't apply to the world of experience (e.g. Kaccānagotta Sutta SN 12.15). And one of the ways of expressing this is to say that experiences are anātman - they don't have any kind of substance.
So to say that the self exists, or that at death it ceases to exist, is simply to misunderstand the situation. The sense of being a self, like the taste of peach, only persists when the conditions are present. It ceases, for example, if one is knocked unconscious! Or if one experiences nirodhasamāpatti in meditation. What we loosely call "self" is just an experience. At death that experience stops arising in us. Buddhists argue that either immediately, or after a period of time, that the experience arises in another being, based on the condition of the last moments of the dead persons conscious experience.
The implication here is similar to what we find in the philosophy of Kant. Everything we know comes from experience. Experience is constantly changing. Therefore we cannot know anything that is permanent. If something were permanent we'd either have to always know it or always be ignorant of it. In fact simple introspection shows that experience is constantly changing and nothing is constantly in our minds - ergo we can have no knowledge of anything permanent. If there is a permanent ātman, we could never know anything about it.
It is important for Buddhism that rebirth happens. Without it the morality of Buddhism falls apart. Buddhists are realistic enough to see that in this life the wicked frequently go unpunished and the good go unrewarded. All moral systems of thought are oriented towards a "Just World" in which everyone gets what they deserve. In most moral systems this is overseen by a supernatural agent, a god of justice (e.g. in the Vedas Mitra and Varuṇa over see different aspects of keeping things in balance). Without a supernatural agent, it is necessary that the moral agent live again so as to experience the consequences of their actions.
In the India systems with an ātman or jīva (i.e. a permanent aspect of the psyche) that passes from life to life this is straightforward. For Buddhists it is complicated by our denial of personal continuity. An ātman would wreck our metaphysics and so we have this on going tension between morality which demands continuity to obtain a just world, and metaphysics which denies continuity because permanence would ruin dependent arising.
When we try to apply this theory to objects that exist independently of our experience (such as in the chicken soup example) then the theory does not hold together. Buddhists who tried this ended up proposing contradictory notions such as the Two Truths, which rather than rejecting asti and nāsti, try to argue that objects are both asti and nāsti. This is because objects and experiences are of a very different nature. What is true of experience is not necessarily true of objects. It is a bad mistake to use a theory of experience as a theory of objects; and a catastrophe to use it as a theory of reality.
Such a theory was never meant to stand up to the kind of scrutiny we now subject it to. It was an ad hoc explanation for something that was widely believed to be the case in North Indian by at least the 8th century BCE. and for centuries people all over the world found it plausible.
Theories of Emptiness
It is quite wrong to say that the Buddha did not teach a theory of emptiness. If you look for the Pāḷi words suññā (empty) and suññatā (emptiness) you will find that they occur many times. A survey of these uses in the Pāḷi texts and their Chinese counterparts can be found in

CHOONG, Mun-keat. (1999) The Notion of Emptiness in Early Buddhism. 2nd. Ed. Motilal Banarsidass.

Also I believe that Bhikkhu Anālayo's new book, Compassion and Emptiness in Early Buddhist Meditation, tackles some of the same themes (though I have not read it).
It is true that the doctrine of emptiness changed over the centuries, but the Buddha (if the early Buddhist texts do represent his words) did indeed teach about emptiness. The early Buddhist texts (and the Āgamas more so than the Nikāya) use the idea of emptiness in a number of ways:

An empty place (i.e. where there are no people), which is used as a metaphor for ...
A samādhi state (Pali suññatāvihāra; Chinese 空三昧 = Skt śūnyasamādhi) in which there is no experience, i.e. a state in which there is no conscious mental activity.
The emptiness of the world (suñño loko) of self or anything belonging to self (suññaṃ attena vā attaniyena vā).
A synonym for nibbāna.

These meanings were developed over time into the various theories of emptiness we know about today. The 3rd use in Pāḷi is adapted by Nāgārjuna to give the classic early Madhyamaka interpretation of emptiness which is that dharmas are empty of svabhāva - i.e. that nothing can be a condition for it's own existence (which was an implication of later Abhidharma speculation).

If you do not inherently exist as the theory of emptiness states, why bother meditating or doing anything...you don't really exist. How is coming to a realization that you are basically an illusion and that your existence is transitory with no inherent existence supposed to release you from suffering. If the theory of emptiness were true, it would be nihilistic and the worst possible news. This is why Buddhist think they have to meditate for decades or for lifetimes to achieve stream entry, because they have wrong views of emptiness to begin with.

I can only redirect you to my answer, which you have evidently not read.

atman, the theory of emptiness most definitely does not mean that nothing exists or that everything is pointless. You are correct, that is a nihilistic view and would be very bad. In fact, it is warned against repeatedly that if you come away with this view after learning the theory of emptiness that you have misunderstood something. In other words, I believe the theory of emptiness and do not in any way consider myself to have a nihilistic view or believe that nothing exists or nothing functions.

"Just as when, with an assemblage of parts,
  there’s the word,
  chariot,
  even so when aggregates are present,
  there’s the convention of
  living being"

To say an assemblage of parts constitutes the word "chariot" as a convention is not saying whatever the chariot really is lacks inherent existence. Its fundamental reality could be transcendent.
The self cannot be found within the aggregates within our conventions of self that identify with the body...because the true self TRANSCENDS the aggregates and the body. If this were not so, and you did not inherently exist, the convention of self would simply cease to exists once the aggregates dissolve in dukkha in the same why a "chariot" ceases to exist once the wood, wheels, etc of the chariot are taken apart.
Using your logic, the chariot would also take rebirth because the "chariot" would be a cause of the next chariot on some undefined spiritual plane. It is all nonsense. The Buddha never taught a theory of emptiness. If he did, then there would be no concept of the "Chitta" or illumined mind and no hope of salvation from Samsara, because there is no one to be liberated and nothing really to be liberated from. Just a big mirage of emptiness. But the Buddha is clear that the citta, or illumined mind, transcends the 5 aggregates. From Pali Canon...

[MN 1.436, AN
  4.422] "Whatever form there is, feelings, perceptions, experiences, or
  consciousness (the five aggregates), these he sees to be without
  permanence, as suffering, as ill, as a plague, a boil, a sting, a
  pain, an affliction, as foreign, as otherness, as empty (suññato), as
  Selfless (anattato). So he turns (pativapeti) his mind (citta,
  Non-aggregate) away from these (aggregates); therein he gathers
  (upasamharati) his mind within the realm of Immortality. This is
  tranquility; this is that which is most excellent!"
[DN 1.76]
  "This is the quelled and thoroughly purified mind (citta) cleansed,
  unblemished, devoid of impurities, pliable, manageable, steadfast,
  adamantine, so he directs his mind towards gnosis and vision; such
  that he knows: 'This is my body made up of materiality, and the four
  great elements, come from mother and father, kept going on rice and
  gruel, without permanence, liable to be broken and destroyed, and here
  also is my consciousness (vinnana) which is entirely dependent upon
  it.
[SN 3.234] The Aggregate Sutra. At
  Savatthi "Followers, the desire and lust for formations is a
  defilement of the citta, the desire and lust for feelings is a
  defilement of the citta, the desire and lust for cognition is a
  defilement of the citta, the desire and lust for experiences is a
  defilement of the citta, the desire and lust for vinnana is a
  defilement of the citta. But, followers, when one abandons the
  defilements of the citta regarding these five stations (aggregates),
  then ones citta inclines towards renunciation. Ones citta is made
  pliable and firm in renunciation by direct gnosis."

To repeat, my position is that the Buddha absolutely DID NOT teach a theory of emptiness. He taught anatta...a theory of non-self. In other words the self cannot be found in phenomenon because it transcends the world of phenomenon. This is supported by Buddha's description of Citta..the illumined mind, all over the Pali Canon as a transcendent property beyond the 5 aggregates (I have sited various quotes here already to support this). In addition, here is the Buddha's description of Nirvana:

"“There is, monks, a not-born, a not-brought-to-being, a not-made, a not-formed. If, monks, there were no not-born, not-brought-to-being, not-made, not-formed, no escape would be discerned from what is born, brought-to-being, made, formed. But since there is a not-born, a not-brought-to-being, a not-made, a not-formed, therefore an escape is discerned from what is born, brought-to-being, made, formed. (Udana, p. 109)"

Once again, notice the Buddha is describing a reality that transcends Samsara. Does that sound like a theory of emptiness to you?

But if you look in the whole exchange between Mara and Vajira in the Vajira Sutta, it is quite clear that the Ven. Vajira is saying that just as chariot is just a convention that is applied to a collection of parts and doesn't exist except as a mere convention, so too a person or self is a mere convention applied to a collection of parts. Mara taunted her asking if there is a self, and Vajira could have easily said that the self transcends the aggregates but she didn't.

Yes. And look at the last stanza in that verse! BTW @atman if you use paragraphs you make your answer much easier to read!

@atman care to provide a source for the passages you've quoted here? I don't recognize the Sutta numbering you've given.

The question seems an objection to Mahayana concept of emptiness. I will try and give the answer to this objection from the Prasangika viewpoint:

the self should simply cease to exist because that which made you a self has dissolved and since you do not inherently exist you should just vanish

I don't think there is any reason to invoke rebirth if this is your objection to the emptiness of inherent existence. By this line of reasoning, if phenomena lacked inherent existence (ie, they are empty), then moment-to-moment in this very life, a person would vanish. However, we do not vanish. So, either the line of reasoning is based on incorrect assumptions or it is valid and leads to absurdity thus refuting emptiness of inherent existence.
I believe the line of reasoning is based upon an incorrect assumption: that things lacking inherent existence will be unable to function.
Let's set aside the selflessness of phenomena and look only at the selflessness of the person as this is agreed upon by Theravada and the Mahayana. It is clear, the Theravada posits the selflessness of persons. That people lack inherent existence.
This line of reasoning also refutes the Theravada position: if people lack inherent existence, then they will be unable to function and thus they will vanish in this very moment! So either the line of reasoning is flawed - it assumes the incorrect assumption that lacking inherent existence renders things non-functional - or the Theravada selflessness of persons has also been refuted as well.

I can tell you this, nothing exists in Samsara that does not change from one moment to the next, so we must be empty of a self that never changes, empty of an atomic self that can't be divided or quite simply empty of a soul. Conceptual things are empty of existence, like "chicken soup" because we make them up, we assume them into existence...in ultimate reality "chicken soup" is just what it is in the experience of the one experiencing the chicken soup, moment by moment, there are no words in ultimate reality.
Ok now, you write, "...in this theory, your illusory sense of self comes from the right causes and conditions, parents, a body, a brain etc. following this logic, upon death, the self should simply cease to exist because that which made you a self has dissolved and since you do not inherently exist you should just vanish...".
Are we talking about "the self" or "the sense of self"? Why follow this theory or this logic that most people who don't meditate just assume makes sense, when we as Buddhists can come up with theories based on our faith in the Buddha's teaching and/or our inner experience through practices such as meditation? I mean theories that are in harmony with the Buddha's teaching such as,
1) "the body or brain receives the mind(home of the delusion of self) much like a radio and does not actually make the mind."
2) "Death of the body from the point of view of the one dying is just another change and delusions will come along with the one dying to the next life unless the one dying has reached Nibbana."
3) "When we let go of our delusions is when we vanish like some kind of super hermit that needs absolutely nothing to be happy and at peace because being attached to nothing is what gives one real authentic peace and happiness."
By the way, how does something that doesn't exist vanish except perhaps through realization? I hope I understood the question correctly. -metta

It is very simple. If you are arguing all phenomenon lack inherent existence, you are basically saying nothing really exists. When the aggregates dissolve, there is nothing left because there was nothing that really existed in the first place. Just a mirage.

I was a long way from finishing my answer when you posted this comment(sorry about that). I finished the answer now though :)

I added some paragraphs because I find it very difficult to read solid blocks of text, Hope you don't mind.

@Jayarava  Attwood Thank you, I appreciate that.  I couldn't figure out how to do formatting like you did there. I suppose somebody has answered a question about how to do it somewhere.

one trick is to make sure you have 2 spaces at the end of lines. Or two carriage returns.

To add to these other answers, the question seems to overemphasize the 'dependent' aspect of dependent origination. See the Visuddhimagga (Path of Purification), which also points out the resulting risk of deviating into nihilistic views. At XVII, 20-23:

Among the conditions described under the headings of ignorance, etc., the respective conditions that make the [conditionally-arisen] states beginning with formations arise are incapable of making them arise when not mutually dependent and when deficient. Therefore this conditionality by depending (paþicca—ger.) makes states arise (uppádeti) equally and together (samaí saha ca), not piecemeal and successively—so it has been termed here thus by the Sage who is skilled in phraseology that conforms to its meaning: it has been accurately termed “dependent origination” (paþicca samuppáda), is the meaning.
And while so termed:

The first component will deny the false view of eternity /
  And so on, and the second will prevent /
  The nihilistic type of view and others like it, while the two /
  Together show the true way that is meant.

The first: the word “dependent” (paþicca) indicates the combination of the conditions, [522] since states in the process of occurring exist in dependence on the combining of their conditions; and it shows that they are not eternal, etc., thus denying the various doctrines of eternalism, no-cause, fictitious-cause, and power-wielder.3 What purpose indeed would the combining of conditions serve, if things were eternal, or if they occurred without cause, and so on?
The second: the word “origination” (samuppáda) indicates the arising of the states, since these occur when their conditions combine, and it shows how to prevent annihilationism, etc., thus preventing the various doctrines of annihilation [of a soul], nihilism, [“there is no use in giving,” etc.,] and moral-inefficacy-of- action, [“there is no other world,” etc.]; for when states [are seen to] arise again and again, each conditioned by its predecessor, how can the doctrines of annihilationism, nihilism, and moral-inefficacy-of-action be maintained?

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text:
If karma is objective, how come it's cause for "good" rebirth?
EDIT: I'll try to be clearer in what I want to know.
The philosophy of good/bad, like/dislike is really irrelevant.
Question: If karma is neutral, then how come "good" karma leads to "good" rebirth. These aren't my words, I've heard it being said: "good karma leads to good rebirth". What "good" means in the context of Buddhism is beside the point and why Buddhists even use the term "good rebirth" is another question. Weather or not being rich is ultimately a "good" thing, "good" karma still leads, rather conveniently, to "good" rebirth, which I take as meaning rich and healthy since that is the only interpretation I've heard.
But what I want to understand is why doing good can't lead to rebirth as, for example, a worm? Why does "good rebirth" mean to be born generally fortunate (by unenlightened standards) when karma is neutral?
I hope that clarifies.

It's hard to pin down what you mean by 'neutral'. Could you make this more clear?

Well, If I've understood correctly, karma is neutral in the sense that it doesn't judge my actions.

It sounds like you are still personifying karma, which is just not accurate from a Buddhist perspective. Can you please give a specific source for where you got the notion of karma as neutral? The contradiction may come from a faulty premise (that "karma is neutral" in whatever sense you mean).

I'm not sure on the exact source, I've probably just picked it up somewhere and somehow jumped to my own conclusion/misunderstood completely. But there seems to be something called "neutral or ineffective karma", which is a separate kind of karma from "wholesome and unwholesome karma" according to http://www.buddhanet.net/fundbud9.htm "Neutral karma is karma that has no moral consequence". So I guess that settles that. Does that mean it doesn't affect rebirth at all?

Thanks, that's very helpful. I honestly don't know what it means in terms of effect on rebirth, but I agree with you this seems to resolve your question.

Okay, I will take a shot. As I understand it...
Karma (Pali: kamma) cannot judge actions because 'kamma' refers to the intentional actions of persons. The result or fruit (Pali: phala) of some intentional act (kamma) is related to that act in a lawful (although complex) way.
We say that healthy habits tend to lead to having a healthy body because of a causal relationship between the action and result. If one exercises, eats healthy food, and keeps her body clean, this tends to promote bodily health. The laws of physics and biology are not judging someone's bodily habits; it is simply the case that, the laws being what they are, 'healthy choices' such as exercise  tend to lead to healthy results (cardiovascular health), and 'unhealthy choices' such as smoking cigarettes, tend to lead to unhealthy results or disease (cancer).
In the same way, according to Buddhism, the nature of the universe is such that certain kinds of bodily, verbal, and mental actions are causally related to certain kinds of results. If, e.g., one initiates good actions, i.e., one intentionally gives, is kind to others, and seeks to learn from the wise, this will tend to produce good results including fortunate future birth. As in the above analogy, the laws governing kamma are not judging you; it is simply the case that, the laws being what they are, 'good/skillful actions' such as kindness tend to lead to good/desirable results (being born beautiful), and 'bad/unskillful choices' such as intentionally killing beings, tend to lead to bad/undesirable results (short life as a human or birth in animal or hell realm).
The relationships between intentional action and its results were well-known, we hear, by the Buddha, who taught them to others. See, e.g., the Maha Kammavibhanga Sutta

That's an excellent answer @Aamokkha

Karma doesn't have or reflect an agenda, so it's not agreeing with or encouraging behavior any more than the law of gravity is "punishing" someone who steps off a cliff by smashing them into the ground. But it still hurts or kills us if we step off a cliff - even if we do so mistakenly thinking we can fly. Gravity won't stop and go: "hmm, this is a perfectly nice person who is just confused and not suicidal, I think I'll let him/her down gently this time."
A major difference between karma and rules like the law of gravity is that karma is cause-and-effect of the mind, not just the body. Because we have minds, we can be happy and we can suffer. Each of us wants to be happy, so karma is called "good" when it brings about happiness. None of us want to suffer, and we call karma "bad" when it brings suffering.
However, we're just sentient beings so we are very confused about things most of the time, including about what intentions and actions will really bring happiness and end suffering. (All too often, we're the well-intentioned fool stepping off a cliff and meaning to fly.) The ethical teachings we study and practice in Buddhism are trying to guide us out of this confusion, as we train in more skillful kinds of behavior and thought. Most importantly, they call for long-term thinking: yes, being rich (if it makes you happy) is the fruit of good karma; but what use is it to build up good karma and then burn up the ensuing good fortune in mundane pursuits? On the other hand, if we adopt a vast motivation (such as bodhichitta) and aim toward awakening as a Buddha for the sake of ourselves and all sentient beings, all the acts of body and mind directed toward this end will eventually lead to stainless, perfect happiness of a different nature, one entirely beyond the stimulus-driven ups and downs of karma.

A "good rebirth", or more precisely rebirth in a beneficial destination (sugati), is good because it is conducive to liberation. It seems to me that you are defining "good" and "bad" in decidedly non-Buddhist terms. Likes and dislikes contribute mainly to suffering, not to happiness. And the view that likes will make you happy is the main wrong view Buddhists are trying to correct.
Being rich, for example, sounds like a bad rebirth since too much wealth can get in the way of intention to practice, because you'll spend all your time indulging your likes and dislikes. Though there are one or two notable exceptions to this in the traditional legends, like Anathapiṇḍika for example who gave all his wealth to the Saṅgha.
As far as Buddhism is concerned there is only one really good state to be in and that is nibbāna, and that does not involve rebirth (punabhava). So any life in which the conditions are good for ending rebirth are "good" conditions.

There's another view of Karma that's more "objective".
Karma = the motivations for your actions. These motivations have nothing to do with "good" or "bad" actions, but rather whether you're acting out of attachment or non-attachment.  Your actions will strengthen or loosen your attachments, and your attachments when you die govern whether you're reborn or not.  If you're reborn, you're reborn with your attachments at death.
Since attachments = suffering, the quality of your new life has nothing to do with your material conditions.  It doesn't matter if you're born rich or poor, beautiful or ugly, healthy or diseased.  Die with a lot of attachments and you'll suffer more in the next life because of those attachments, and vice versa.
In short, Karma doesn't determine the quality of your birth by some decision made based on whether you were "good".
Full Disclosure: I treat Buddhism as a philosophy and thus don't believe in Karma or any other metaphysics. However, I encountered this view of Karma previously and felt I could contribute it despite my beliefs.

I think you might be getting hung up on the idea of neutrality.  Karma isn't a system of divine justice dolled out by a celestial being.  It isn't vindictive or rewarding - karma just is.  You might want to try to understand it as a kind of natural force like gravity or electromagnetism.  Karma is "neutral" in the same way.  For instance, we don't go about our days worrying about offending gravity!  Of course, we certainly know that if we decided to jump off of a building, we might not like the result.
I think the second sticking point here is a very common one - namely that karma has anything to do with good and bad.  Jayarava Attwood touches on this in his answer, but I think it can be taken a step further.  You have to remember, karma literally means action.  The Buddha's great discovery was that correct action (of which right action - samyak-karmanta - is a part) had nothing to do with expressing your caste as in the Brahamanical system of his day.  Instead, right karma were those actions that expressed virtue and renunciation.  These actions lead to better conditions in this life because they create a kind of moral momentum.  The same deeds become easier the more often they are done.  They also help people arrive at better life circumstances.  You see this all the time in individuals who change their behavior and suddenly find their relationships going better and their general lot in life improving.  From life to life, good karma can also result in rebirths were enlightenment is easier to attain (i.e. the human realm).  Obviously, it works the same way for negative karma.
So to sum up, yes karma is neutral but just as a balanced scale will tip if you add too much to one side, karma does reflect those actions that one is putting their volitional weight behind.

A good birth
A good birth is not about physical wealth.It is actually about mental potential and health.
(A)- Imagine you are a rich man
(B)- Imagine you are a dog in a rich man's house
(C)- Imagine you are a Poor man
(D)- Imagine you are a dog in a poor man's house
As you can see option (A) is good,but why
Buddhism  has a signature and it is always referring to the path to nirvana.
So the "Good" here is the man in option (A) can easily do many good things when the man in option (C) would have to go through many obstacles in life.
The dogs have no potential so obviously it is a bad birth.
Now consider this
(A)- Imagine you are a rich man, But very unhealthy
(B)- Imagine you are a dog in a rich man's house, But very healthy
(C)- Imagine you are a Poor man, But very healthy
(D)- Imagine you are a dog in a poor man's house, But very unhealthy
The rich man has an issue,He is unhealthy but the poor man is not.So the rich man is fortunate to have wealth but not so fortunate to have health.But the poor man was the exact opposite.
Now consider this
(A)- Imagine you are a rich man, But very stupid
(B)- Imagine you are a dog in a rich man's house
(C)- Imagine you are a Poor man, But very wise
(D)- Imagine you are a dog in a poor man's house
As you can see even though one man is rich he has very low potential to reach nirvana.But the poor man is wise so he is with great potential.This change everything making him the most fortunate,the best birth among these four.
Now consider this
(A)- A god.
(B)- A human.
(C)- An animal.
An animal has no potential towards nirvana.But a man has much,therefore he is more fortunate and his life is good compared to the animals life.
But when you compare a god with a human you see that the god has much more potential than a human.So in this pair the god is the lucky one.
A good Karma
A good karma is something you do which would effect positively in this life or many lives to come.These could give you a birth with much potential to reach nirvana and make you healthy,strong,kind,wise and etc.It could also be powerful enough to give you a birth in higher realms,making it easier for you to reach nirvana.
So any karma that would ease your path to nirvana is a good karma,any birth that would give you a better chance to reach your path to nirvana is a good life / birth.
May triple gems bless you!

I have heard it said that taking birth as a god often makes it more difficult to reach/strive for nirvana than being born as a human; (1) since one's experience in that life will be mostly pleasurable, it is harder to notice the true nature of conditioned existence (i.e., it is dukkha), (2) relatedly, since one does not suffer much, one will be less motivated to seek an end to suffering.

@Adamokkha It is a common misunderstanding.Let me explain when you were commenting for my answer you were on the internet,You could have done anything else to have fun.Anything you need is just a mouse click away but still we come here in search of Dhamma. Why?, because just like wise "Devas" we are driven by our "Shraddha" and "Prachna / panya (wisdom)".If you study tippitaka you will find many answers to your question how deva realm is full of devas meditating and teaching others.....    (please read the rest on the comment below)

I would also like to remind you the very first time lord Buddha spoke (Dhammachchakka paaththana sutta). When this event happened billions of devas in many realms reached nirvana within minutes time,But only one human was able to understand it from the five listening.As to Buddha the ability of a deva's mind is far more better than a human and they have more control over it. Look around yourself how many good friends do you see that will help your path? in deva realm there are millions to help you. I would like to propose you to read my answer again. May triple gems bless you!

If your very happy, your very wealthy. Good karma could lead to a rebirth were one is poor but happy due to wholesome conduct in the present life like not clinging to the sensual or material world. Bad Karma could lead to a rebirth where one is rich but miserable due to craving the material or sensual world in the present life.


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Sharing merit in Theravada Buddhism
When you are sharing merit with someone, are you visualizing the person you are sharing the merit with?
When you are sharing merit with all living beings, are you imagining all beings? How do you do that? What do you really do from Theravada perspective? Thanks all.

Similar questions: Actions taken to transfer merit ... Transfering merits ... How can merit be transferred?

The idea of "sharing merit" or "transferring merit" is very popular in Theravāda Buddhism. I do not believe that it has a basis in the Suttas. I have read that this concept was introduced much later because of folk beliefs.
The closest thing in the Suttas to sharing or transferring of merit is in Pv 1.5 / Khp 7, which talks about food / drink and ghosts:

Outside the walls they stand and at crossroads. At door posts they stand, returning to their old homes.
  But when a meal with plentiful food & drink is served, no one remembers them: Such is the kamma of living beings.
Thus those who feel sympathy for their dead relatives give timely donations of proper food & drink — exquisite, clean — [thinking:] "May this be for our relatives. May our relatives be happy!"
And those who have gathered there, the assembled ghosts of the relatives, with appreciation give their blessing for the plentiful food & drink: "May our relatives live long because of whom we have gained [this gift]. We have been honored, and the donors are not without reward!"
For there [in the ghost realm] there's no farming, no herding of cattle, no commerce, no trading with money. They live on what is given here, hungry ghosts whose time here is done.
As water raining on a hill flows down to the valley, even so does what is given here benefit the dead. As rivers full of water fill the ocean full, even so does what is given here benefit the dead.
"He gave to me, she acted on my behalf, they were my relatives, companions, friends": Offerings should be given for the dead when one reflects thus on things done in the past. For no weeping, no sorrowing no other lamentation benefits the dead whose relatives persist in that way.
  But when this offering is given, well-placed in the Sangha, it works for their long-term benefit and they profit immediately.
In this way the proper duty to relatives has been shown, great honor has been done to the dead, and monks have been given strength: The merit you've acquired isn't small.

Here is how I understand this Sutta... Dead relatives hang around things to which they were attached during their lives (places and relatives), but nobody cares. When you see good food and drink, you should think "May my deceased relatives be happy". When this is done, your deceased relatives will rejoice because they have been honoured. Ghosts lead a difficult life and offering the thought "May my deceased relatives be happy" helps and sustains the ghosts. Crying and lamentation does not help the deceased relatives, but offering the thought "May my deceased relatives be happy" helps and sustains the ghosts. If the food and drink is offered to the Sangha, the there is even more merit because the monks gain strength as well.
There is another popular chant sometimes called "Sharing Merit with Devas" (not sure where this originated... can't find it in the Tipiṭaka or commentaries):

Ākāsaṭṭhā ca bhummaṭṭhā
  devā nāgā mahiddhikā
  Puññaṃ taṃ anumoditvā
  ciraṃ rakkhantu sāsanaṃ.
Ākāsaṭṭhā ca bhummaṭṭhā
  devā nāgā mahiddhikā
  Puññaṃ taṃ anumoditvā
  ciraṃ rakkhantu desanaṃ.
Ākāsaṭṭhā ca bhummaṭṭhā
  devā nāgā mahiddhikā
  Puññaṃ taṃ anumoditvā
  ciraṃ rakkhantu maṃ paran"ti.

The key word here is "anumoditvā", which is sometimes incorrectly translated as "sharing"; what it really means is "to rejoice" / "to be thankful" / "to appreciate". In other words, we are inviting the Devā to rejoice in what merit we have done... we are not transferring anything to them. Anyway, Devā have lots of merits of their own, so why would they need ours? :-)

the 165th verse of the Dhammapada, the 9th verse of its Attavagga, says

Attanā hi kataṃ pāpaṃ,
  attanā saṅkilissati;
  Attanā akataṃ pāpaṃ,
  attanāva visujjhati;
  Suddhī asuddhi paccattaṃ,
  nāñño aññaṃ visodhaye.
By oneself is evil done;
  by oneself is one defiled.
  By oneself is evil left undone;
by oneself is one made pure.
  Purity and impurity depend on oneself;
  no one can purify another.


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Which sutta is this excerpt about Buddha's death from?
An ordained Bhikkhu shared the following with me.

"You have done what is good and wholesome, you have made a shelter
  from fear. You have not done anything to harm other. You have not been
  greedy and immoral. You have forgiven the world difficult life
  pleasure and pain with compassion and after death you will be reborn
  in a happy destination." … said Buddha before death when he invited
  all the monks and followers to come and watch how the noble one dies.

I do not know if he paraphrased and I could not find it with a Google search... he was saying the idea that Buddha died from eating bad pork was incorrect.
He was vaguely referencing mushrooms as a possible cause and then also mentioned that Buddha died through some supernatural phenomenon and this was in some Pali sutta.
I was wondering if anyone knew where this quote is from (and hence the rest of the story)?

As to the cause of death, DN 16 is taken to mean that he recovered completely from the sickness caused by the meal, and died as predicted due to his giving up the life faculty three months prior.

The quoted passage sounds vaguely like the last paragraph of Ud 8.5 the Cunda Sutta. For example you quoted,

You have done what is good and wholesome ... after death you will be reborn in a happy destination

Thanissaro's version of that,

Cunda's remorse should be allayed ... it's well-done by you ... Venerable Cunda the silversmith has accumulated kamma that leads to heaven

However much of the rest of it doesn't match the your quote, e.g. "you have made a shelter from fear" sounds like it's addressed to people who have taken refuge (i.e. "all the monks and followers").
But then again it is a bit like the poem at the end of that sutta ("not greedy" -> "giving" and "You have forgiven" -> "no animosity").
For a person giving,
merit increases.
For one self-restraining,
no animosity is amassed.
One who is skillful
    leaves evil behind
and
 — from the ending of passion,
    aversion,
    delusion —
is totally unbound.

Anyway (whether or not this is the sutta which the Bikkhu wanted to share with you) this sutta too is from towards the end of the Buddha's life, and may or may not mention pork,

The Commentary notes a wide range of opinions on what "pig-delicacy" means. The opinion given in the Mahā Aṭṭhakathā — the primary source for the Commentary we now have — is that pig-delicacy is tender pork. Other opinions include soft bamboo shoots or mushrooms that pigs like to nibble on, or a special elixir. Given that India has long had a history of giving fanciful names to its foods and elixirs, it's hard to say for sure what the Buddha ate for his last meal.

The Buddha's final days and death are described in the Maha-parinibbana Sutta
I don't see anything there quite like the quote you mentioned. According to the sutta, the Buddha's final words were:

Behold now, bhikkhus, I exhort you: All compounded things are subject
  to vanish. Strive with earnestness!

Concerning the final meal, the text says that the Buddha's final meal was 'Sukara-maddava'. The translators of the version I linked to have noted several possible interpretations of this phrase, including that it was a tender pork dish, a dish containing some kind of mushrooms that pigs find delightful, and a dish that has bamboo that has been trampled by pigs.


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Does the Buddha's concept of Citta contradict the Mahayana doctrine of emptiness?
In the suttas quoted in this answer, the Buddha describes the Citta as pure, free from defilement and transcending the 5 aggregates, and its liberation from samsara as the highest aim of his teaching.
Is this evidence that the Buddha never taught "emptiness" (in the Mahayana sense of "emptiness of inherent existence"), and does it contradict the Mahayana doctrine of "emptiness?
Pabhassara Sutta
AN 1.49-52 PTS: A i 10 (I,v,9-10; I,vi,1-2)

Where in the Suttas did the Buddha teach that the Citta is something separate from the 5 aggregates? In fact, saying that Citta as distinct from the phenomenal world and is eternal is the fourth case of partial-eternalism described in the Brahmajala Sutta.

Further to this comment please clarify where to find the suttas you referenced.

"Whatever form, feelings, perceptions, experiences, or consciousness there is (the five aggregates), these he sees to be without permanence, as suffering, as ill, as a plague, a boil, a sting, a pain, an affliction, as foreign, as otherness, as empty (suññato), as Selfless (anattato). So he turns his mind (citta, Non-aggregate) away from these; therein he gathers his mind within the realm of Immortality (amataya dhatuya). This is tranquility; this is that which is most excellent!" [MN 1.436, AN 4.422].

While citta seems to show some variations according to context, it's literal meaning is "thought", but also has been identified primarily with "state of mind". Here's Sue Hamilton analysis1:

By this I mean that citta is the term used to refer to the qualitative picture, as it were, of the way all one's mental processes are functioning at any given moment. This is very different from any of the different mental processes of which the whole 'mind' is comprised: citta is neither an entity nor a process (which probably accounts for its not being classified as a khandha, nor mentioned in the paticcasamuppada formula), but is a term which abstractly indicates one's progress on the path, or even more generally, one's mental condition.
[...]
Understanding citta to mean 'state of mind' clarifies otherwise confusing passages, such as the following examples: "Without understanding the thoughts of his mind, one is reborn in life after life [...] with a restless state of mind". Likewise: "My state of mind is not of such nature that it will return to kamabhava levels of existence; knowing this, one's state of mind is well acquainted with wisdom". Johansson suggests these (and other similar) passages imply that citta
  "seems to signify a surviving entity". But what they are indicating is that one's state of mind reflects one's progress, or lack of it, on the path to insight.

Claiming that citta is everlasting is not just a challenge to suññatā, but a challenge to anatta, and thus, a contradiction to pretty much the entire canon on that matter (whose summary has been written as sabbe dhamma anatta: all dhammas are not-self). Finally:

"Bhikkhus, you may well cling to that doctrine of self that would not arouse sorrow, lamentation, pain, grief, and despair in one who clings to it. But do you see any such doctrine of self, bhikkhus?"
  —"No, venerable sir."
  —"Good, bhikkhus. I too do not see any doctrine of self that would not arouse sorrow, lamentation, pain, grief, and despair in one who clings to it."
-- MN 22

1 See "Identity and Experience: The Constitution of the Human Being According to Early Buddhism"

Excellent post. I would like to note for the benefit of people reading who haven't seen the questioner's original post in the other question that they don't accept the teaching of non-self as it is generally presented, but believes in a transcendental self that is separate from the aggregates, which sort of opens pandora's box.

@Bakmoon When I was told (or was read) the story of Pandora as a child, it said "Hope" was a blessing i.e. one kind gift to counteract all the bad. But now I read on Wikipedia, "hope was usually seen as an extension to suffering by the Greek" and "perhaps a child of Nyx and mother of Pheme" and "the debate is still alive to determine if Elpis was only hope, or more generally expectation".

This Wiki entry talks about the meaning of citta and the different ways various traditions have conceived of the purified, luminous citta. As is the case for all appearances (whether pure or impure) there is no contradiction between appearance and emptiness from a Mahayana perspective (at least the Indo-Tibetan flavor): citta is not taken as having true, inherent existence in the reified and impossible sense that is refuted by the view of emptiness. As simply one example of the coalescence of appearances and emptiness, go back to the Heart Sutra.  In Thich Nhat Hanh's lovely translation:

this Body itself is Emptiness and Emptiness itself is this Body. This
  Body is not other than Emptiness and Emptiness is not other than this
  Body. The same is true of Feelings, Perceptions, Mental Formations,
  and Consciousness.

As one's understanding of emptiness and dependent origination deepens, the reasoning that "things appear because they are empty, and are empty because they appear" actually becomes quite compelling and seems quite simple (though profound) when compared to more elaborate analyses such as the "vajra splinters" reasoning (referenced here).

When you say Mahayana, I think maybe it's good to differentiate between Cittamatra and Madhyamaka, both Mahayana. For Cittamatra there's "mind only", and the mind is based in a mind basis of all mind. This mind basis of all in Cittamatra seems to be not empty of intrinsic nature, it seems to be the basis of all mind, existing in and of itself.
In Madhyamaka on the other hand there is no mind basis of all, there is only emptiness and the emptiness of emptiness. The Madhyamaka would perhaps say that Cittamatra has not negated enough, not taken into account the emptiness of emptiness.


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Is love a destiny or coincidence in Buddhism?
There are many examples, a couple wants to be together but break up after long-term dating, they want to get married but they never get married. A person wants to get close with another person and vice versa but they can never get together no matter how hard they try, etc.
In Buddhism, our life is not destined so how are we supposed to understand above situation?
What makes someone has the affinity to become someone's parents or children for, for example, two lifetimes? What power determine the meeting? Is the affinity merely automatically created from the person we normally associate with in daily life?

Are you looking for answers from all affiliations within Buddhism or only from the Theravada affiliation?

The Samajivina Sutta, as follows, can hopefully shed some light on this question.

Once the Blessed One was staying among the Bhaggas in the Deer Park at
  Bhesakala Grove, near Crocodile Haunt. Then early in the morning the
  Blessed One put on his robes and, carrying his bowl and outer robe,
  went to the home of the householder, Nakula's father. On arrival, he
  sat down on a seat made ready. Then Nakula's father & Nakula's mother
  went to the Blessed One and, on arrival, having bowed down to him, sat
  to one side. As they were sitting there, Nakula's father said to the
  Blessed One: "Lord, ever since Nakula's mother as a young girl was
  brought to me [to be my wife] when I was just a young boy, I am not
  conscious of being unfaithful to her even in mind, much less in body.
  We want to see one another not only in the present life but also in
  the life to come."
And Nakula's mother said to the Blessed One: "Lord, ever since I as a
  young girl was brought to Nakula's father [to be his wife] when he was
  just a young boy, I am not conscious of being unfaithful to him even
  in mind, much less in body. We want to see one another not only in the
  present life but also in the life to come."
[The Blessed One said:] "If both husband & wife want to see one
  another not only in the present life but also in the life to come,
  they should be in tune [with each other] in conviction, in tune in
  virtue, in tune in generosity, and in tune in discernment. Then they
  will see one another not only in the present life but also in the life
  to come."
Husband & wife, both of them  having conviction,  being responsive,
    being restrained,   living by the Dhamma,   addressing each other   with
  loving words: they benefit in manifold ways.  To them comes bliss.
  Their enemies are dejected    when both are in tune in virtue. Having
  followed the Dhamma here in this world,   both in tune in precepts &
  practices, they delight in the world of the devas, enjoying the
  pleasures they desire.

I think this answer is saying that it's not "predestination", instead it's the result of conscious choice and intentional action.

At the same time, our conscious choice is not completely under our control, which is contradict with Samajivina sutta. The working of kamma is not depending on our choice. Further, there are many, if not, so many husbands and wives are not in tune in conviction, not in tune generosity, not in tune in virtue but have met in this life and married. Is this a conscious choice or there are more to it?

Karma?
Maybe there is some more in-depth explanation but if a couple breaks up there are probably reasons for it, maybe they have communication issues or somebody cheated on the other (I believe the latter is a no-no according to most religions, Buddhism included). As for communication issues, if people don't talk and are unmindful they will bottle things up until they blow.
If two people want to be together but can't because they, for example, live on opposite sides of the world and can't afford to move, that must surely be related to karma. Whether they were born too poor or did deeds that led to that situation, I leave that to the experts.

There are occasion where two persons are always communicating, trying to understand each other but the effort doesn't seem to work. Even if it works both persons can't be together, whatever the reason. Is love a destiny or not destined?  Can anyone share your thoughts? Thanks.

Seeings as Buddhists don't seem to believe in predetermination, I don't see how love could be destiny, since destiny implies something will happen regardless of what a person does or doesn't do.


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Why are Buddhas always Indian, male and human?
Dipankara, Siddhartha Gotama, Maithreya to name a few (of the 28 named in the Buddhavamsa) - it feels a bit like a Hollywood plot where it's always only an all American hero that fights off the alien invasion of planet Earth.
Given that the dharma is universal why isn't a Buddha a deva or a Pacific islander or a woman?
Why is it also always only one person and not like say a united nations of Buddhas?

Same reason Jesus is always a youngish white guy with a beard.

This a Theravada or Mahayana question? Buddhavamsa is 1st or 2nd century AD, so it would predate Mahayana.

The question has two parts. Why only one Buddha? This is only in the Theravāda. In other Buddhist schools two, five, or up to millions of Buddhas can be seen. Two in the White Lotus, Five in the five Buddha Maṇḍala (featuring Vairocana Tathāgata, Akṣobhya Tathāgata, Ratnasambhava Tathāgata, Amitābha Tathāgata, and Amoghasiddhi Tathāgata), and an infinite number in the Avatamsaka Sūtra. Most non-Theravādin schools accept the existence of multiple Buddhists.

The second part is why ethnically North Indian? Artists in different countries tend to depict the Buddha as having features similar to their own ethnic group, and besides have nationally distinctive styles, so one can usually tell say a Khmer Buddha from a Chinese, or a Tibetan. Many of the Buddhist artists (the image is by my colleague Dharmacārī Āloka) I know paint the Buddha as similar to themselves - since most of the artists I know are English or Kiwis, their paintings tend to look Anglo-Saxon. But there's nothing to stop, say someone of African descent portraying the Buddha as African.
And of course there is some cross over. So Khmer artists tend to portray solitary Buddhas but with Khmer features, whereas Tibetans portray many Buddhas with Tibetan features. For some artists it makes sense to portray Gautama Buddha as an Indian because it seems more historically authentic, though of course we do not know the ethnic identity of Buddha - it's possible the Śākyas originally came from Iran for example.

I've edited my answer to try to clarify. Does that help?

Thank you. About ethnicity I was thinking of the names more than facial features, which are each in Sanskrit. Plus, the encounters between Buddha Dipankara and Buddha Gowtama in his past lives always occur in and around north India.

There are some really cool Buddhist sculptures from in and around Pakistan that actually shows Greco-Roman influence - specifically in the hair.  http://www.egyptsearch.com/forums/ultimatebb.cgi?ubb=get_topic;f=15;t=006561

@nemo True, the Kushan period is overall radically innovative and accepting. They were Mongols who lived in Pakistan, spoke Gandhari, worshipped Hindu and Buddhist gods and used the Greek alphabet.

Would you happen to know of any sects that have female Buddhas or Buddhas whose origin myth is in a country or region other than India?

@Buddho - look at http://www.mb-schiekel.de/ ; not a buddhist school, but a female Buddha... :-)   (The author of the homepage is a far but dear friend of mine)

@Buddho Tara might be one, though her origin is disputed.

Given my time with the reading & practice of Zen, Buddhism & Sanatan dharma with a lot of spiritual people, I'll answer this from a different Point of View.
Jayarava's answer is perfectly accurate to say why people in various places and cultures portray the enlightened Master the look up to in different ways.

it feels a bit like a Hollywood plot where it's always only an all
  American hero that fights off the alien invasion of planet Earth.

A lovely thing I remember hearing some time back if you want to learn:

Marketing - Americans
Manufacturing, Precision, Quality - Germans / Japanese
and so on..

India, or I will refer to a more accurate word for the region currently labeled by the British as India; Bharat by its name & history has been the center of spiritual evolution & wisdom; flavors of knowledge & wisdom have emanated from that region.
Each person & place has to play a role, something special to play its karma in the universe.
So, while Americans always fight off alien invasions courtesy of their Hollywood machinery and brilliant influence on world pop culture, silently the spiritual flavors of ancient wisdom have been reaching the corners of the world over centuries or more.

SideNote:
The word Hindu is inaccurate as it was derived from 3 pieces
  that make up H-Indu-Sthan. It was the name given by those that traveled to the Indu river valley

H - Persian / Farsiy had no way to speak / write Indu so the 'H' sound got prepended
Indu - They meant to point to the River Indu

For most people, things were mapped by major landmarks - Rivers, Seas, Mountains, Valleys, Forests.

Sthan - Sanskrit loosely translate to 'Place, Spot, location'

India's name is / was - Bha-rat -

"Bha" means Light and Knowledge,
"rata" means “Devoted”.

Everyone, every place, every nation, every atom & molecule have to play their part in the universe which has been labeled as both:

Nothing - Nir-guna
Everything - Sa-guna

PS: Guna - loosely translated attributes/ properties

Given that the dharma is universal why isn't a Buddha a deva or a
  Pacific islander or a woman?

Which is the reason why people traveled to spread the word.
Its also the reason why the missing years of Jesus, it is said he was in Bharat, in an area called Kashmir where his name has been found mentioned as 'Isa' or 'Issa' {pronounced: Eee- Saa - h}

Why is it also always only one person and not like say a united
  nations of Buddhas?

There have always been Masters like that all over the world. If you look for them, you will see there above lies your United Nations.
Spirituality unites or actually reminds us its all one.. Union.. Yog.
Ego & material nature of human beings draws lines & divides us into Nations.

Adding a note since someone hit negative on my answer :) just because they disagree - opposite of what Buddha or any enlightened master teaches us.
So, Masters did not belong to Nations. If anything, every time a Master has come to the planet, they have come to help whoever they can reach, directly or indirectly.
Masters do not associate with Nations, Cultures or People,
It is the Nations, Cultures and People who identify with associate with a Master.
Hence, people take on rituals & rites, methods & flavors; and later even fight with other groups over those details.
Masters do not create factions, they join everyone, or should I say they are here to "remind" and "make us realize" that we are already ONE.
So, when they teach LOVE thy neighbor or Compassion, those are not for the other, but to for US, to realize the Oneness and practice it as something you are not doing for other, but for yourself :)
Hence the term "self realization", reminding and realizing that we are the all-pervasive universe - everything & nothing. :)

first of all Alex S is right about what he said,But i think a response from Theravada must be added to this.
As we believe there is a special planet in the universe,the planet is always earth.But this time it was India next time it will have a different name.As we believe the place Lord Buddhas will achieve complete wisdom will always be the same.If you want to look in to this search for the word "Mangala / Magul Sakwala"

Hi Hammer and welcome to Buddhism SE. Could you clean up the grammar and spelling in your answer and add some references to the search word, you are refering to? That would make it easier for other users and the OP. Thank you.

Thank you for the acknowledgement.Good to see a sri lankan   in this with us.

Hope you good luck in your efforts @Lanka

Thank you. May you be well and happy and have a fruitful practice.