This is going to be flamed to death. I'll give you exactly what I think. I far prefer Morrowind.
Morrowind is better for the lore it adds, it's more immersive, and everything is more diverse. I also prefer the interface of Morrowind.
Oblivion is a faster paced game. It breaks some lore, and is very cliché. It has better modding capabilities.
In Morrowind, skills matter more. In Oblivion, there is a lot more player interaction. Speechcraft and lockpicking are made redundant, and raising my block doesn't make a bg enough impact, for me. I think Morrowind's system is far better.
Many skills have also been cut from previous games in both cases. Oblivion has even less, since it's cut down from Morrowind, which was cut down from Daggerfall.
The only issues I see for Morrowind are bugs and outdated graphics. But, they're fixed by mods.
Anyway, anything you see here, even my post, is going to be one sided. You'd really have to play a game yourself. If you're low on funds, I'd reccomend Morrowind, though, as it sells for around £3 for GOTY.
Oh, and all of Morrowind's official DLC is free. None of this silly paying £5 for a mod I could have created myself.
- If you prefer a faster paced game with quite shallow "Good vs Evil" questlines, go for Oblivion.
- If you prefer a slower paced game, where character skills are immensly important, with in depth quests and lore and grey morality, go for Morrowind.
Graphics are completely irrelevant. Morrowind can look far better than Oblivion, when mods are concerned. It all depends on your system. I think Morrowind has a tad higher fps drop from it, though.
And, the all important phrase that people obssess over in Morrowind vs. Oblivion threads: IMO. About everything I've said. This is what I believe, and you're free to feel different. Don't flame me for giving my honest opinion.
Oh, and if you get Morrowind, play vanilla. I'd reccomend to only use graphical enhancers and bug fixes. You'll want to experience the game for what it is, first.