Well, after a lot of trial and error and reading lotro forums, I think I've fixed the random disconnection thingie. Apparently this was caused by lotro using more memory than my 32bit vista was able to address.
Fixed it by assigning only 1GB to Vista and leaving the rest of the 3GB available for lotro.
Unfortunately, one problem remains: whenever I'm zoning, dying, logging back in after leaving the game recently, the game will freeze at the splash screen (pulsing one ring, no progress on the bar).
Eventually I'll get a disconnection from server, and when relogging I'll either get "searching for logon server x20" or again the splash screen with no progress on the bar.
So I now fixed it so that I can solo-play the MMO but any instancing seems to be out.
I'm back to mailing Codies - but I've decided that when I haven't been able to fix it once the trial is up I'm giving up on the game.
Pity really, it looks good fun.