I don't habe MGE installed. In fact i don't have any mods. I reinstalled the game. And i am using XP.
I think you can't use high resolution on your new monitor without MGE installed, but this is how I did it.
1 - http://www.microsoft.com/downloads/en/details.aspx?FamilyID=9cfb2d51-5ff4-4491-b0e5-b386f32c0992&displaylang=en and reboot (must be online)
2 - http://sourceforge.net/projects/morrgraphext/files/Beta%20Releases/MGE%203.8%2B%20SVN%20builds/mge3.8.2-rev.0178.7z/download and extract to Morrowind folder
3 - http://www.microsoft.com/downloads/en/details.aspx?displaylang=en&FamilyID=3b170b25-abab-4bc3-ae91-50ceb6d8fa8d
4 - just launch Morrowind and then exit through the game menu
The MGE is working now if you don't have any errors or issues.