The "Capture the Flag" thing is actually a adaptation of "Relics" from DAOC. There will be items, flags, whatever that one side will be able to capture to gain buffs for their entire side(even outside the PVP area for the Free People). This isn't the first time(or the first game) to go this route, as the Delving is very much like Darkness Falls from DAOC. Whoever controls the most real estate gets access to the special dungeon, just like Darkness falls.

Truly there's more to the PVP in LOTRO than some give it credit for, its not a hap-hazardly put together thing. In many ways its well thought out and full of features you wouldn't expect from only being 1/2 a realm.