"It is a gift, a gift to the foes of Mordor. Why not use this Ring ? Long has my father, the Steward of Gondor, kept the forces of Mordor at bay. By the blood of my people are your lands kept safe. Give Gondor the weapon of the enemy. Let us use it against him."
I think the whole movie would have worked better if they had given the ring to Sean Bean instead of letting him die miserably. Consequently I'm siding with the CN character to keep the dagger and inaugurate himself as the true emperor
Well... considering they're going to the capital and they are rather well-known by this point, meeting with the Emperor would require waiting a week or so for him to schedule them in. The interesting point is, that the Emperor is only a boy of ten (thus, he'd fit into the royal child mold of the composite of the ideas). To make things even more interesting with this idea, I am pretty sure the CN character is plotting to steal the dagger at some point whilst they are in the city, and try to arrange an "Imperial accident," since he has a rightful claim to the throne (along with six other people). The dagger is a threat to him as well, and it'd be interesting to see how he'd dance if he had to choose between destroying this threat immediately, or seizing the initiative but leaving himself at risk from the dagger...
Have something convice the CN to keep the blade and make him some evil dude's patsy. They've waited to long and it would behoove the forces of evil to take advantage of the delay.