There are seven playable characters in the game which have been created specifically for it, as well a small appearances by characters such as Gandalf, Aragorn, Eowyn, Faramir, and Gothmog.
The game does relate to the movies by including scenes from all three movies, with new background speech by Ian McKellen (Gandalf). The Lord of the Rings:The Third Age introduces entirely new characters which aren't mentioned in the books or movies.