I'm familiar with cube drafting - that's actually where I got the idea. I really enjoy drafting, but don't have to money to keep buying boosters ... so I made a cube which has worked fairly well. I'm hoping to do a similar thing for LotR.
Site-wise, my thoughts had been to make site packs of 9 sites, and draft them last. Otherwise, it could work to make blank sites available after the draft ... sites with no rules text except maybe a keyword. That way you can fill up to nine sites without (entirely) getting to pick-and-choose your favourite sites. We'll probably end up trying both and see what works.
Since I'm making my own card pool, I'm hoping to avoid having to use starter decks or draft packs. Thranduil, I think your percentages are pretty good ... even more minions couldn't hurt.
Another problem I've noticed is the number of cards needed for a deck. In Magic, a forty card deck only contains 23 or so drafted cards (out of 42 ... hurray for basic lands in boosters

), while in LotR, a forty card deck needs 40 drafted cards. So it would need seven eleven-card boosters to have the same ratio of played to unplayed cards. So I think I'll probably use larger (15 or more) card boosters in order to simplify things a little.