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The problem with most strategy games is that they essentially boil down to massing the biggest amount of units. Even hallowed TBS titles like Heroes 3, for example, suffer a bit from this. Other titles, specifically most RTSes, are thinly designed abstractions of "build, build, build".
Lords of the Realm 2, though, avoids this pitfall almost completely. The RTS battle portion, with it's insanely strategy-demanding maps and it's beautifully balanced yet simple units, puts more stress on the skill of the general (you) than on the size of the army. Over the last week since I rebought this on GoG, I've fought battles utilizing an amazing array of military strategy and terrain utilization to win seemingly impossible battles against armies with superior numbers. On the TBS side, the depth is equally impressive. Resource management, juggling raising and feeding armies with pleasing and feeding your people, is a very tricky process with the capacity to collapse with alarming speed. Having to make the difficult decision to pull your limited amount of peasants off of making weapons so that they can harvest grain for the next year and avoid starvation is quite difficult when a 500-man enemy army is marching in on your much-smaller force. Of course, there's still hope for winning the battle through superior strategy, but if you have to bail, you can cut-and-run and leave your enemy with a devastated county to conquer.
In my last game, the fighting got so bitter that my enemy and I completely destroyed the resources within a wide swath of land. The result was, since armies need to eat (which is an optional setting, but more fun to play with than without) and there was no food for such a long stretch, that any army trying to march across the devastation to fight the enemy would starve to death before arriving at their destination. The solution was to send supply carts ahead of the armies to the counties if you wanted to attack, and if you didn't want to be attacked, to try to intercept and destroy the enemy's supply carts before they reached the county to feed the troops. Such a strategy required many small armies (because risking losing a large army to starvation is insanity) to defend and attack these carts, the resources in which were extremely valuable to begin with and were devastating to lose. Instead, a war was fought along another path across another county, unintentionally devastating a Lord that happened to be in the way.
My point is that this game can take some pretty unexpected, very strategically demanding paths that you wouldn't ordinarily run into in other games. Heroes, Starcraft, and even Myth (although it beats LoTR on the battle strategy front, I'd say) don't have these potential situations.
The game does have a few minor negatives. For example, selected groups of units in battle will try to form themselves into formation. This is ok for moving them places but the fatal flaw of the setup is that when you select them and before doing anything else, the selected group will move into formation immediately. In addition, the units around them will move out of the way to accommodate them. This can result in very carefully positioned troops moving themselves into range of enemy fire and other unfortunate occurrences like this and is insanely frustrating. There might be some advanced combat controls somewhere for changing this behavior, but all I can find in the manual is hotkeys for making the troops assume horizontal or vertical formations (H and V keys). I haven't played with this yet, but it might alleviate some of the pain.
Outside of battle, diplomacy with the AI could be improved slightly. Alliances are mostly useless, as I have yet to to have an ally help me out in any way. The only thing my allies do is betray me at the worst possible moment. However, I haven't played the campaign (just been playing custom maps), so there might be some scripting there to improve this.
Finally, in LAN games (which don't seem to work on the one Vista box I've tried, but work just fine in XP), all info boxes seem to vanish very quickly without giving you a chance to read them. This might be a problem with my setup, but it might also be something designed to make people not drag on their turns or something... For experienced players, this isn't too bad, but it's extremely annoying at first.
Other than that, the game's pretty much perfect. The flaws are present just like in anything else, but everything except those three complaints is practically perfect. For $5.99, it's criminal not to give this game a try.