I have not played LOTRO, but am looking forward to the F2P model.
I am a longtime pay-subscriber to Turbine's other child, Dungeons & Dragons Online (DDO). I can relate details of DDO's F2P model, which based on the OP's link, I would guess is how LOTRO's F2P will be like.
Cliffs: Free-2-Play is like a very long and large demo. If you stick with it for a very long time, you can open up the entire game without paying real money.
1. The first taste is free - In DDO F2P, you can access the most of the lower-level content for free. You can re-run quests as many times as you want. You use "Turbine Points" to purchase "Adventure Packs." The "Adventure Packs" contain additional quests/instances. You can pay real $$$ to purchase Turbine Points.
2. I've heard that you can easily achieve level 10 without buying any Adventure Packs. The highest character level is level 20.
3. After level 10, Free content is rather sparse, and some of the most popular quests must be purchased with Turbine Points.
4. DDO has a "Favor" system. Basically, the more quests you complete and the higher the difficulty level of the quest, the more "favor" you earn. Everytime you earn a certain amount of Favor, you get free Turbine Points credited to your account. I have no idea if LOTRO has something similar, but I hope so.
5. Someone did the math, and figured out that with enough grinding, you can earn enough favor to earn enough Turbine Points to be able to purchase every Adventure Pack available. They did say that it would take awhile though, and require multiple characters. I do believe that some people take this route.
6. VIP (Paying) subscribers get 500 "free" Turbine Points per month. I usually just save up to buy more bank slots or +2 Tomes.
7. VIP's get 8 character slots per server. F2P get 4, I think, with the option of buying more. VIP's get access to all the races and classes (although some must be unlocked with favor), F2P must pay for a few.
8. DDO was dying before F2P, but there was a diehard core group of players. The community tended to be more mature than WoW's. There was a server merge, and then for over a year, there was no new content. Then Turbine rolled out the F2P model. We got a huge influx of players, and new servers were opened. Many of them were (and still are) immature and unwilling to learn. Many others have proven a good fit for the more mature DDO community. Overall, it's a plus.
I hope I get picked for the LOTRO beta.