The sandbox forum is set up exactly like that. You can check it out here:

http://sandbox.livesitehost.com/start.html

Also, Captcha is automatically required for any Custom Form that is completed by someone that is not logged in already… :)

Thanks. That helps. However I still need documentation details for the setup to allow different moderators to control selected forum pages/threads/topics and to get email notifications to the selected moderator so they can approve the guest. Surely you must have some documentation somewhere relating to forum setup? I searched and can't find anything helpful.

For example, How do we choose to allow any registered guest comments to be posted with or without moderation? How do we setup different moderators for certain topics/pages?

You'll need to use liveSite's built-in liveSite features to create your custom forum app and here's some guidance:

1) moderators get email notifications to the selected moderator so they can approve the guest

You would probably need to use the Membership features of liveSite to approve new guest access to your forums (pages placed in a Membership Folder). However, only one email address can be notified to approve new members. You could use a Membership Trial feature of the Custom Forms to automate the sign up of new guests.

2) moderators to control selected forum pages/threads/topics

Moderators in liveSite are defined for each view list page (forum) but can only get notified of and approve comments. See the Form List View Page Properties for the settings.