I'd like to dissect his character in depth to see if we can flush anything out that may have been missed in the past. Should I err, please feel free to correct me, and your opinion is greatly appreciated (and desired!).
A family lesson: Gwyn is the nephew of Allfather Lloyd, who is the head of the Way of the White. Havel is an apostle to Allfather Lloyd, and a bishop of the Way of the White; he was also an "old friend" of Gwyn's. It is also mentioned several times that Havel is a little salty about magic ("Havel the Rock, an old battlefield compatriot of Lord Gwyn, was the sworn enemy of Seath the Scaleless. He despised magic, and made certain to devise means of counteraction." -Great Magic Barrier). A fairly popular theory (and one I subscribe to) is that, when Gwyn made nice with Seath, Havel felt betrayed; no doubt he tried to warn Gwyn that Seath was treacherous (after all, any being willing to betray their own kin won't blink at betraying someone else's), but I doubt Gwyn gave it a second thought, rashly moving on to kindle the fire. It is at this point that I believe Havel took matters into his own hands. We see an occult club hidden in a mimic in the storeroom in Anor Londo with the rest of Havel's gear--for those of you playing the home game, occult weapons were considered "god-killers". It seems that Havel, his heart heavy with regret, set out to right the wrongs Gwyn had set--possibly starting with Gwyn himself (side-note: Havel may have formed an alliance with Velka, being as he was able to acquire such a taboo weapon that only she would have access to--just something to think about). Where Havel messed up was in taking his own strength for granted. He'd been invincible for so long, he refused to accept the obvious: that he was no match for a god. Armed with his club, he probably went to launch an attack on Gwyn, where he was foiled (and in the process, Hollowed). Here is where I encounter some confusion: If Havel fought during the age of the ancients alongside Gwyn, then he must have gone after Gwyn right after the war was over (which makes sense, given the timeline); however, if he was Hollowed immediately, then he was hollow for over a millenium, which lends itself to some questions. But, if he wasn't Hollowed immediately, what happened? Is he superhuman, capable of living hundreds of years (part of the "time is convoluted" theory, perhaps)? Just some patchiness in the lore.
So Gwyn kindled the fire ~1000 years before the events of Dark Souls. Is it likely that Havel has just been chillin' in the Watchtower Basement for 1000 years? Not really. Consider the amount of wear and tear there would be on the building--if we're being realistic, it probably would have crumbled long ago, and he would be running around doing God knows what. Frankly, there aren't a whole lot of characters other than Gwyn who would have the capability to lock Havel up in the first place; there are, however, a few who were powerful enough AND had access at the appropriate time: Allfather Lloyd (and by extension, the church of the Way of the White), Frampt, the charred blacksmith in the Darkroot Garden, and Seath.
I'm not going to rule out Allfather Lloyd entirely, but there's no evidence whatsoever that he had anything to do with Havel's Hollowing or locking away. The same goes for Frampt, with the added complication of how the hell exactly is Frampt--a serpent--going to lock up an out-of-control Havel the freaking Rock? I mean, good luck bro. That leaves the blacksmith and Seath, but I really don't think it would be feasible for a blacksmith to lock Havel up either (though it's likely they were acquainted; the divine ember is found near the charred body, suggesting Thorolund, and by proxy, the Way of the White). So we're left with Seath--an "old friend" in only the darkest sense, but the tone that the sarcasm would require is reinforced by the ending line, "For his own good, of course", making it plausible. Fortunately, we have more than simply process of elimination to go on:
A) Having seen both burnt and cursed bodies in the world of Dark Souls, it's safe to say that the body of the blacksmith resembles the latter (reference the boss battle with Seath--when you go back to fight him the second time, a black shell of your body is in front of him--a result of his curse attack). Going off of that, I'd say that it's likely he was cursed by Seath; perhaps the blacksmith was attempting to aid Havel and Seath wanted to endmhim once and for all.
B) The blacksmith's body is guarded by the Moonlight Butterfly; it's likely that the Moonlight Butterfly is just a buffed-up version of the crystal butterflies in the Crystal Caves (courtesy of Seath's experiments) being as they share roughly the same attacks and appearance (the exception being that the Moonlight Butterfly is green and more powerful). It would make sense, then, that after Seath went to the trouble to stop the blacksmith from reaching Havel, he would station a sentry to guard against further intrusion.
C) In a similar vein as B), the Crystal Golems scattered around the outside of the Watchtower Basement are identical to the ones in the Crystal Cave (again, products of Seath's alone-time). Seath would have known the danger Havel posed, and wouldn't stop at simply locking him in a tower that would eventually erode and set him free. Thus, he posted sentries around the tower to dispatch of Havel when he (inevitably) would break free.
Of course, none of this information is concrete, but it's a fairly safe bet, given the large amount of evidence.
Additionally, just for controversy's sake, we have the theory that Havel isn't actually THE Havel, and it's just one of his men hanging out in the tower.
Frankly, I don't agree with this theory at all, but let's look at it.
The case against Havel in the tower hangs on a couple of common misconceptions:
A) Should you choose to kill him, the stone-clad warrior drops Havel's Ring; the point has been made that Havel's men wore the ring, but not Havel himself (he was just too much of a badass!).
B) The dragon tooth is a generic weapon, and isn't specific to Havel.
C) Havel's set is in Anor Londo--far, far away from the Undead Burg where you encounter him.
Now let's go back through and look at these.
A) The ring description reads: "This ring was named after Havel the Rock, Lord Gwyn's old battlefield compatriot. Havel's men wore the ring to express faith in their leader and to carry a heavier load." Now, the way it's worded makes it seem like ONLY Havel's men wore the ring, but it doesn't say Havel DIDN'T wear the ring either; nor does it do anything to suggest he didn't. And even if we go along with this idea that Havel didn't wear the ring, remember that it's named after him and it represents the faith his warriors had in him. Even if he didn't WEAR it, it wouldn't be far-fetched in the slightest to assume he carries it as an token of sentimental value to establish a link to his men. Simply because an NPC drops something does not mean that they were using it.
B) This is not true at all. Here's why: on Havel's Greatshield, the description says "Greatshield of the legendary Havel the Rock...A true divine heirloom on par with the Dragon Tooth." Notice that "Dragon Tooth" is capitalized, signifying a title (rather than "a dragon's tooth", the general object). In addition to that, the comparison between the greatshield and the Dragon Tooth is phrased in such a way that it ties them both to the "legendary Havel the Rock", implying that both are unique to him. The usage of the word heirloom reinforces this theory--if every warrior had one, it wouldn't be so special. Furthermore, the Dragon Tooth description says "Created from an everlasting dragon tooth. Legendary great hammer of Havel the Rock"; there's that "legendary" again. "Legendary great hammer OF HAVEL THE ROCK" implies that it belonged to Havel--and Havel only. Whenever somebody tries to contest this point, I counter with this: we know that Havel's men wore the exact same suit of armor that he did (the armor description says "[Helm/Armor/Gauntlets/Leggings] worn by Havel the Rock's warriors"). How would they be able to distinguish between themselves and their leader if he didn't have some sort of signature weapon or armor? Clearly, he doesn't have unique armor; therefore, he has a unique weapon to set him apart.
C) This is true; however, I don't believe that's meant to mean anything. Say what you will--I think this is just one of those things that they did in the game as a metaphysical gesture. Look at it this way: if you killed Havel in the Undead Burg as an early character (which isn't that hard, especially if you have the Drake Sword) and got his armor, shield, and weapon, one of two things would happen: A) You would not be able to use any of it and would thus be motivated to grind in order to be able to use his gear, which is something the game developers discouraged, or B) Somehow, you would be able to use some or (unlikely) all of his equipment, and you would be incredibly OP--decidedly against Dark Souls' ethos. I don't believe there's a ton more to be said about that matter; what with the Dragon Tooth and the greatshield being specific to Havel alone, I can safely say that it is, without a doubt, Havel the Rock in the Watchtower Basement.
In conclusion, it's clear to me that Havel was a man of moral fiber; his strength was not just physical. His heart guided him just as much as his strategies did, and in the end, he was Hollowed trying to do what he say as the right thing. Personally, I think Havel is one of the coolest characters in Dark Souls, and I'd love to hear from the rest of you!