Because of its later release date, Oblivion has a heavy lead on graphics. And I do like the way they made combat fun in oblivion as opposed to a chore, like in Morrowind. So, Oblivion takes the first one handily.
The original and cloak-and-dagger world of Morrowind has so much to offer. Choices, excitement, it is just great. Compare the FG in Morrowind to the MG in Oblivion. In both cases, you have an organization that has been corrupted internally in some way, with some "white hats" that can boarder on being Templars and some Black Hats whose motivations actually make a good deal of sense within the game world. In Morrowind, you got to choose which side of that conflict you found yourself on. Heck, if you really want to help the "white hats" out as much as possible, you've got to do some morally dubious things like helping out the TG! And the interplay between the TG, the CT, and the FG (as well as the CT and HH) lead to a very interconnected game-world. In Oblivion, you have *no* choice. You follow the White Hat's orders and that is that. Plus, it doesn't link up with any of the other factions or questlines in a substantial way. Morrowind wins this one by a very large margin.
Community: They both have wonderful communities. No need to take sides here, they are equal. GH Flig's seminal mod that introduced Oblivion physics into Morrowind from a few months ago comes close to giving Morrowind the edge on this one
, but then I think about all the great stuff going on in the Oblivion boards (Total Conversions, anyone) and I just can't make that call.
Add-ons: Again, I'd say these are about equal. MGE, The Black Mill, the Illuminated Order, Dread Knights, Julan, etc, those are all amazing! But I wouldn't trade them for Malevolence, OOO, FCOM, the crazy quest one that you need LAME for, LAME, etc. Great stuff. The Morrowind community is more seasoned, so many of the mods they create are just crazy. But the Oblivion engine allows for greater possibilities, and many of the mods I listed really take advantage of that fact.
Overall: Morrowind, but Oblivion is obviously fantastic as well.