I'm about to go off to school, and want to use my laptop for my main gaming since I'll have a roommate and we have to share the TV. I have Morrowind for the Xbox, but was wondering if the Steam edition of Morrowind will allow you to use mods? I am not planning on mods, but want to know if I can if the time ever comes.

Absolutely. B)

Some prep is in order though - if you're using Vista or Win7, make sure to install Steam outside of your Program Files folder (e.g. C:\Steam\etc ), that way you avoid access issues with older games like Morrowind especially when modded; you'll need to redate the bethesda bsa archives in order for mod replacers to work properly.

See the http://www.gamesas.com/index.php?/topic/1097626-morrowind-graphics-extender-mge/ thread for details, near the end of the FAQ on the OP - the important part is about redating, you only need to disable Steam's in-game community support if you also decide to run MGE.