@Stickybottle2 & JornOvera.
Having Sauron make a personal appearence at the Battle of the Black Gate would have just twisted the story almost beyond recognition. Not only would it have completely contradicted the books, I think it would also have detracted from the Heroism of all who volunteered (because Aragorn would only take willing participants in the final battle) to stand with Aragorn & co. at the Black Gate.
The War of the Ring couldn't possibly have been won through conventional strength of arms - Saurons Legions were simply far too vast to defeat outright; and the armies of the Free Peoples were too exhausted and depleted after centuries and millenia of warfare. The army of Free People who defied Sauron at the Black Gate faced certain death and they knew it. The battle was essentially a last gambit, a "Hey Sauron! Over here, look at me!" to draw Saurons Legions out of Mordor and give the Ringbearer the chance to fulfill his Quest.
Having Sauron personally appear at the battle would have totally undermined that heroism and sacrifice, because then the Battle would have been about Killing Sauron (or otherwise defeating him in person) to win the war; as opposed to deliberately and knowingly fighting to the death on the slim chance that it would help the Ringbearer.
Its a case of Bravery in the face of apparent hopelessness (something which is touched upon in the Extended Edition DVD appendices; versus Killings Sauron himself and ending the War by cutting off the head of the snake (the quick and easy way).