So we most likely wont be able to turn them either?

No idea.  The commander for each team will be commanding the capital titan I would think - not sure if they can program in turning.

Why not have the two titans immovable at each end of the map, and smaller, flyable cap ships without interiors that can be moved around?

Are we going to be able to move the capitol ships up and down? The titans only move on the X-Z axis... No Y...

I doubt it, but that's not a big deal.  Most space battles in popular sci-fi series usually take place with a generally 2-D confrontation on one plane.

As the space Mapper I guess the question is for me. I will explain what I can about our current space map, engine limitation and future ideas:

A) The ground/water cannot be removed from bf2, how ever we can;
B) Make the water at any height (-1000000000000), which is sort of erralavent when:
C) The terrain cannot be any lower than height 0
D) The terrain can be (and is) invisible
E) We can choose the amount of gravity on any object in the game (This includes 0g), but we can't change the amount of gravity on the fly.
F) The ceilling height is unlimited (planes can fly as high as they want)
G) We can position capital ships several Km (haven't worked out the theoretical limit yet) above the "terrain' and with 0g there is no verticle acceleration, so it will take a long time to hit the ground.
H) After a certain height the engine starts lagging to all hell and models start to shake apart somehow (I believe I was at 5,000-10,000km about the terrain)
I) Titans use a system of 'portals' to attempt to reduce lag, this system will hopefully be introduced on Capital ships.

To summarise:
We cannot do anything about the terrain, except position the battle a sufficiently long way away from it to make hitting it unrealistic to ever hit it and make it invisible. If we make the battle too far above the terrain, the engine starts to colapse (Having terrain appears to be either an integeral part of the engine, or the numbers just become to large for the engine to crunch). All going to plan titans will be used as capital ships to stop issues with players driving them off the map and to combat lag, If we can assign a different amount of gravity within a titans 'portal' we may even be able to implement 0g players in space.

very interesting

A) The ground/water cannot be removed from bf2, how ever we can;
B) Make the water at any height (-1000000000000), which is sort of erralavent when:
C) The terrain cannot be any lower than height 0
D) The terrain can be (and is) invisible
E) We can choose the amount of gravity on any object in the game (This includes 0g), but we can't change the amount of gravity on the fly.
F) The ceilling height is unlimited (planes can fly as high as they want)
G) We can position capital ships several Km (haven't worked out the theoretical limit yet) above the "terrain' and with 0g there is no verticle acceleration, so it will take a long time to hit the ground.
H) After a certain height the engine starts lagging to all hell and models start to shake apart somehow (I believe I was at 5,000-10,000km about the terrain)
I) Titans use a system of 'portals' to attempt to reduce lag, this system will hopefully be introduced on Capital ships.

To summarise:
We cannot do anything about the terrain, except position the battle a sufficiently long way away from it to make hitting it unrealistic to ever hit it and make it invisible. If we make the battle too far above the terrain, the engine starts to colapse (Having terrain appears to be either an integeral part of the engine, or the numbers just become to large for the engine to crunch). All going to plan titans will be used as capital ships to stop issues with players driving them off the map and to combat lag, If we can assign a different amount of gravity within a titans 'portal' we may even be able to implement 0g players in space.