Oblivion's style for one reason; you're actually penalized in the form of less armor/enchantment slots for choosing a beast race in Morrowind. Also, Morrowind is so far the odd-man-out when it comes to how the beast races were designed, in all the other games, they followed a more-or-less human bodyplan.
...Not sure. It's awesome to have advantages and disadvantages between races, but at the same time I'd rather have the option than not. It would be cool if there were argonian exclusive helmets and boots.
My only reply is to point out that Khajiit and Argonians have snouts. How the hell are they supposed to fit those in a full face helmet? But this can be solved by helmets just becoming open faced and boots becoming shinguards when they're equipped on one of the beasts races.
My thinking is along the same line as these guys, more-or-less.
I liked that in Morrowind Argonians and Khajiits were more beastly, less human in form. Variation and all that. I would like to see that again, rather than the animalised-human forms of Oblivion. If the other TES games are similar in approach to these forms, I couldn't say, I've only ever played MW and OB.
I don't think that these races should be unable to wear helmets or boots. I'd like to see specific items for these races, perhaps, at least for appearance sake. Or standard items should just automatically 'modify' in consideration of snouts and longer toes or whatever - like what Broken-Scale said.