hi first off i wanted to say this, morrowinf has been out for almost twelve years, and over thes years it has had a very very active modding community, there are so many mods and texture replacer out there that along with the MGE you could make ,morrowind look as good if not better then oblivion these day see this for what I mean
http://www.youtube.com/watch?v=S0Jxt-yZ-so&feature=related never mind the obnoxious voice over.
anyway back to my orginal post there are many many textures an mesh replacers used for morrowind that could be with some work put into morroblivion, for you own personal use of course, for texture replacers use a a photoshop editer like gimp take the texture and create a normal map for it (you will need a gimp normal plugin for this) and then save the orginal color texture as dxt 1 and the normal map as dxt 3 (make sure the opacity is below 95 percent).
for meshes (weapons and static only I have yet to see a good method in doing armor) you can create a new convex, or take an objects collison and the put it over the mesh.
here is a link to some good morrowind textures that can be used (they really are good people)
http://pnfiles.gamespy.com/hostedftp/planetelderscrolls/fms/files/mods/8987/Modlist_Credits13.pdf
remember ONLY due this for your own personal game, otherwise you are ripping from an author meaning your stealing it/
I'll update this on my own time with a better guide.

Or, Help with this Project