Best way is to make all good factions allied with each other, and the same for all the evil factions, at the start of the campaign.
It's a change I've been testing recently & I have to say that so far I like the way it's making campaigns play out. It encourages the AI factions to start a good vs evil war, rather than the craziness which seems to happen pretty much every game (& especially in Eriador).
Although, lorewise, there was bad history between some of the good factions, and they certainly wouldn't be considered allies in everyday circumstances, when it came down to it they all recognised Sauron as a greater danger who needed to be fought.
Unfortunately, given the constraints of the TW AI the only way to make sure that good mainly fights evil, and vice versa, is to use the alliance mechanism. It's an idea which some people might hate, but having the game develop as a war between the forces of good and evil feels far more lore-flavoured to me overall. Plus, it's not as if the AI is actually very good at acting as an ally, pretty much all it equates to is a non-aggression pact, which IMO represents the positions of the various good factions towards each other fairly well.
It's a change which I'd thoroughly recommend to anyone to give a try.
