I think forcing people into factions was a bad idea to begin with. I'm sure smugglers, troopers, bounty hunters, and agents existed on both sides. Let them start neutral and pick a faction. That way you won't have people complaining that BH has cooler graphics then a trooper. (Mirror classes would have to be changed around in order for this work) Jedi and Sith would have to start with their respective faction, but their LS/DS meter hits a certain level, they could have the option to defect to the other faction.
Of course, its late to implement anything like this now.