Legolas & Gimli on one horse as one knight, and Eowyn as the other knight. They all really should be represented.
Oh, and don’t forget to make Merry & Pippin taller than the other hobbits. I love the Lobelia idea too.
I’m flattered that you think so highly of my artistic abilities, but I’m not that good. And I’m trying not to be unduly influenced by the movies. The Mirror, though, would work. I’ll have to consider that.
As for piece height, the royals are, of course, taller (Aragorn is taller than Arwen and he’s wearing the winged helm, but he’s also sitting and she’s standing, so it works out), but there really isn’t that much variation in height among the pieces. Come to think of it, it would be rather odd for Arwen to be taller than Galadriel (Galadriel was about six and a half feet tall), but I can fix that by having her leaning over the Mirror. And king of spain makes a good point about Merry and Pippen being taller… I’ll have to work out the right poses for that to work (maybe both of them kneeling, as they’re swearing loyalty to their respective lords?).
I’m almost sold on Eowyn and Eomer as knights. This is a chess set, after all, not just a set of statues, so the knights really need to be mounted to be recognizable. I’m not sure that I like the idea of two characters together making one piece, and I’m also not sure that it’d be within my skill to do so convincingly.
And for the record, I plan to depict the Balrog exactly as described in the book.
I had an odd thought: what about using a couple of Ents as knights? It’s unconventional, but it might be neat. You could use Treebeard and Wazzizname (the young, hasty one).
Quickbeam 
Well, if you’re trying to keep the sizes relative to each other, the Balrog piece should be about three feet tall. 
Seriously it sounds like you’re getting good advice from everybody. Since the white pawns will be hobbits distinguishable from each other, what are you going to do with the black pawns (orcs)? Orcs aren’t exactly small creatures either. It’s been a while since the last reading but I remember a few orcs were known by name, such as the two that Merry and Pippin mess with after they were captured, Grishnakh and Ugluk, and then there’s Shagrat and Gorbag that fight over Frodo’s mithril shirt in Cirith Ungol. I think these were all Mordor orcs so they should have the Lidless Eye on their armor somehwere. You could have 4 more with the White Hand displayed to give Saruman a fair shake. Here’s a list of more bad guys.
I like the Galadriel & Mirror concept. Could you actually get a round mirror put in there to reflect her image? That would be cool.
Practically everybody was a pawn in LOTR except for Sauron, Gandalf, Saruman (although he became a pawn eventually by gazing into his Palantir too much), Aragorn, and Elrond. Those were the characters calling the shots. Trying to match a character’s role in the story along with their physical size will be a difficult task indeed.
I just have one question though. When can I place my order?
I do intend on giving the Orcs separate names and making them look different, but I’m not going to worry about specifically distinguishing them aside from making sure they all have the right insignia (Eye, Hand, or Moon). I’m thinking three Mordor-orcs, three Orthanc-orcs, and two Morgul-orcs would be about the right mix. And most Orcs are smaller than humans, at least: At the battle of Helm’s Deep, Gimli remarks that the men were too tall for him, so he kills orcs instead.
Well, at my curent rate, I’m getting about 1 piece done per Christmas break and 2 or 3 per summer, so call it sometime in 2010.
I know this is a bit of a long bump, but I’ve finally got pictures. They’re a bit blurry (it’s hard to get pics of things that size), and I don’t have any yet for Shelob (who looks way cool, trust me;)) or Aragorn (almost done), but go have a look at what I do have.
Do’oh! It apparently didn’t bump last night, despite my post (I understand that happens sometimes, when you get a bunch of errors (as I did)).