The problem is there are many options. Although this is not a problem. Options are great. You can want a colorful Morrowind or darker, maybe natural. There are mods for everyone's taste. If you can't find it, mod your own.
Download counts can give an idea.(false or not)
http://planetelderscrolls.gamespy.com/fms/TopRated.php?content=mods
Most mods can work like overlays so picking a base and installing on it if you see something better is great!
I like Windows Glow 2.2, TLM, changing faces and Connary's textures. Vurt's grass mods and AI tree mod would be the first thing I would install. Installing them onto something like Visual XT will make a huge change. And off course MGE(adding some post process shaders like SSAO, Gimp, Sunshafts can turn the game into Crysis.
)
http://www.gamesas.com/index.php?/topic/1120092-povuholos-morrowind-2010-graphics-and-sounds/
This is pretty recent and you may like what you see there.
Start with fixing the game.
http://www.gamesas.com/index.php?/topic/1110304-povuholos-morrowind-2010/
Use tools like Wrye Mash and MLOX. They help organizing mods a lot.