as we know there are these things called alliance points which you get for participating in pvp. we can assume they are used for rank, or acquiring gear, possibly both. since they will likely be level 50 I imagine that you only get to use the pvp gear in pvp, correct?

There is no "PvP" gear that you would find in WoW. There is gear that you can by from PvPing, but all the gear in the game is the same no matter what. You can use PvE gear to PvP and you can use PvP gear to PvE. There are no PvP stats in the game.

Alliance Points can be used to purchase sundries for PvP, such as siege weapons and engines and the like. Probably a ton of other stuff PvP-related.