As I'm sure people know, PVP2 has been losing players like crazy to PVP1. I believe this stems from an unbalanced player population, where US players greatly outnumbered the other factions who felt it was a slippery slope into oblivion.
I believe a solution (albeit somewhat draconic) is to enforce online player caps based on each faction.
I see two ways to do this..
One is a hard cap, where people could not join the server of a capped faction until someone else left.
Second is a "increasing wait" penalty.. where players will have to wait extended times in order to join the overpopulated faction, but were guaranteed to get in. The waits would probably need to be pretty high (30 min, hour, longer?) to ultimately be effective but it is somewhat more hopeful than a hard cap for players who want to join.
These caps could dynamically grow and shrink based on overall population.
If you would also be able to see a list of factions who aren't at max population, that might encourage people to switch sides. If you could make this easy/free to move from a high population side to an underpopulated one, then people who aren't truly determined to be a particular faction will likely be encouraged to help balance things out. Perhaps even a cash bribe to sweeten the deal.