Hi, I just downloaded better heads and now every NPC has a huge question mark on them and they have no faces.
Do any of you know whats going on?

make sure the meshes and textures are installed into the correct directories

Ok do I put them the folders in or just the files (I am so new to modding)

im pretty sure you can do both, but i would mannually move the tga/dds files and the nif files form the head replacer into the corresponding textures or meshes folders in your "morrowind/data files/textures" or "morrowind/data files/meshes" directory, just so you know where they went

EDIT: changed

If you've changed head/hair replacers mid-save, any NPCs you've already encountered will be pointing to the previous head/hair models. This will always occur when switching to a plugin that uses an esm or esp plugin usually to point to new model paths and override the stock heads/hairs - pluginless replacers point to the original stock model paths so won't have this issue.

Try starting a new game to see if the heads/hairs are there. If so, then you'll probably need to edit the save to correct the model paths used for any recorded NPCs.