If god created everything, then where does evil come from?

Is this another one of those "first cause paradoxes", which was first god or evil. If god is the creator, then why did he create evil or satan? It doesn't say alot about god if he went ahead and created evil just for the sake of it. Did he just want a challange? He could've just saved a lot of time and left evil out of the cosmic stew. Or he could've created us stronger and smarted to not be "tempted" by some horned devil.