[Angry Hill Troll]

The choice which confronted the Dunedain (more those of Gondor than of Arnor) was whether Arvedui or Eärnil should claim the kingship of Gondor, in the absence of a direct heir to the throne. Arvedui's claim was primarily through his mother, who was of the royal family of Gondor, but also as Isildur's heir. This would have reunited the two kingdoms of the Dunedain, which ultimately was achieved by Aragorn. (note that after doing so, Aragorn changed is name, just as Malbeth prophesied that Arvedui would have).

But the Gondorians rejected Arvedui's claim, dismissing the northern Dunedain as poor cousins, whose kingdom, even before its final destruction, had all but dwindled into nothing. Hence the Gondorians regarded the choice of Arvedui for king of Gondor as the "less hopeful" one, compared to Eärnil, who while not in a very direct line of the throne, was at least of the royal house of Gondor (a "real" kingdom in their view).

Malbeth was a Dunedain who acted as counsellor to the royal house of Arthedain, and who was, for whatever reason, endowed with the gift of prophesy.