[Suzerain of Sheol]

Well, yeah, Tolkien didn't really think it was filmable in the first place, hence why he let the rights go for relatively cheap. Whether he would have changed his mind had he been able to see modern cinemagraphic technology, who knows?

But I agree, adapting is a delicate art in translation. Unfortunately, I really feel like this movie in particular (more so than the LotR movies) is Peter Jackson and company telling their reimagining of The Hobbit rather than adapting the book at all, really. I can understand that they have creative ideas and want to try stuff out... I just think it'd be better served if they made their own fantasy movie. I somehow doubt that would bring the same box-office, though...

And for your last point, that depends. In the movies, he's obviously well on his way to being corrupted even here, and Gandalf is clearly suspicious of him. In the books, though, Gandalf and Saruman have nothing but "professional disagreements" until he abducts Gandalf in the Fellowship of the Ring. Saruman did, at this point, have designs on the Ring, though. He was manipulating the council for a long time... BUT he did eventually come around and decide that Sauron/the Necromancer needed to be driven out of Dol Guldur, and lent them his full aid in doing so.