I've heard a little bit about switching factions at level 50 and I'm a bit curious about how this works.

Anyway, I'm most likely going to play as a Bosmer or Dunmer. However, I am mostly interested in residing in Hammerfell and being a part of the Daggerfall Covenant.

So when I join the Covenant could I be a Dunmer fighting against the Dominion and the Ebonheart Pact? Or would switching factions serve no purpose other than to explore their territory?

You aren't switching factions. You are just now allowed to go to another factions zones and do their exact same quests, but scaled for level 50s and you will only see your faction in the zone.

You cant change faction at max lvl.

Hopefully they change that later. Exploring foreign lands doesn't sound much fun if you can't interact with the natives.

I doubt they will ever change it.

Be happy they even implemented this, because it wasn't even originally apart of the plan.

yea like the little green guy says, its just more like a phase for anyone in your faction that has fully completed their own quest line. You can phase into one of the other Alliance safe zones and do the content scaled up to lvl 50+. Then when you are fully completed that area you can go to the next and it is scaled up to 50++. Dev info points to the only people you will be seeing are the ones from your alliance.

They announced that when everyone freaked that they had to roll a new character to adventure in faction specific areas.

I sure hope they don't. Nothing ruins the meaning behind AvAvA like enemies running around being your buddies.

Yep, I agree with you there. With the concept of the game being AvA, I don't expect this to ever happen. I'm sure if they ever decide to open up new lands in later expansions they will let the factions mingle then, but for now Tamriel will always be divided.