Whats the big differences between the two? I'm trying to build a 'hardcoe' game, and I'm debating between the old fallback (OOO) and the newer TIE. Anyone whose played both care to offer his/her opinion?

Have you tried reading the readme files?
They do explain an awful lot.

Yes, but reading a .txt is a lot different from playing the game for tens of hours. I don't want to get a dozen hours into a play through and find its not what I was looking for. Which is why I'm asking for opinions.

TIE uses all vanilla items and works in the CS solely. No new meshes, textures just a massive esp. It gears more towards immersion and thief type characters. Little hoards here and there, guards in castles making life difficult to steal anything. You need to plan a lot to do anything without a hitch. It adds secret entrances to the cities(compatably with BC) and overall adds a lot of little things to the game. TIE also removes the level list for loot. You can get daedra armor or even enemies at level 1. or get nothing for 20+ levels then suddenly you're facing a Netherlich or a wraith. Effects maybe subtle it seems but they do show a lot. I'm personally torn between the two. OOO with MMM adds a lot. More monsters, larger groups to make battles more intense, and makes stealth or full blown offense very useful. Also it makes you need to work for money nothing is cheap anymore, and things are difficult right from the get go. Venture too far from the city, and you get swarmed by nasties that'll pummel you to oblivion(pun not intended). They're both great overhauls, I personally cannot wait for the time when I can play MMM, OOO and TIE together.

http://www.gamesas.com/index.php?/topic/820948-scaling-overhaul-comparison is a good read as well.