First I would like to say great job so far, this whole thing is awesome. I really with I had the technical knowledge to help with the project. Since I don't, I'll help the best I can as a tester.
1: Helm on the Redoran guards. Every time I look in the direction of a guard I get a massive group of purple triangles that takes up half the screen. I thought I saw something about this, but I wasn't able to find any way to fix it.
2: The Join the Thieves Guild option is now in every person I talk to's dialogue, and they all answer "You are already one of us, Toffer." unless they are in the guild, then they have the usual response. I am in the Thieves Guild and House Hlaalu, so I don't know if this happens with all of the guilds.
3: Very few houses and chests that were previously locked in Morrowind are now unlocked. In fact, there are barely any locks at all. I first thought that it was in the chests that were trapped in Morrowind, but it's also in many more.
4: Some creatures are rediculously unbalanced. Admittedly, my guy is still at Level 3, and Kagouti and Kwama Warriors should give me a hard time, but they shouldn't be able to 3 shot me. Although one of the things that made Morrowind superior to Oblivion was the fact that you wouldn't be able to clear the same grave area at lvl 3 as you would at lvl 20, I'm getting wrecked in areas that in the original game I would be able to do.
And I'm just bringing this up because I'm not sure if it was something that people have tried to implement, or will implement at any time, but NPC's still have very little range of motion and are awake at all times. Are there any plans on actual setting the oblivion NPC system up in Morrowind?

Thanks for the feedback.
Thanks for the feedback. Please post future bugs and issues like this in the appropriate place.
Many of the issues you've posted have been either solved or previously discussed.
http://morroblivion.com/purple-graphics-glitch-on-bonemold-armor
This is also mentioned on the project release thread and in the installation instructions...
This is a new one, thank you. Please Create a new Issue, and provide more detail about how this happened. What stage are you in the thieves guild quest line? Any other factions are you in? What stage of the main quest are you in?
Interesting... Your first sentence contradicts you second one. Is there a problem with locks or not? If so, please Create a new Issue, and provide more detail about how this happened. What chests? What doors? Where?
There are differing opinions on this issue. They could easily '3 shot' your character depending on your character's stats of course (e.g. level 3 mage). For now, creatures are what they are, and are probably not going to get changed. Unless you have some evidence that they are really unbalanced besides the fact that they can '3 shot' your character. I guess you could go into the MW Construction set and Oblivion Construction set and make some comparisons to prove it.
This has to do with AI, which is an ongoing project. http://morroblivion.com/forums/morroblivion/mods/763