So I just installed the latest version of the Overhaul, (in my last post I had an outdated version) and once I finished I ran the Morrowind file (none of my .exe files actually have a .exe after them) and the game ran fine, without starting Steam.
But the second time it starts the launcher through steam, and every time I try to open the game in fullscreen it flashes then an error pops up saying:

Render Creation Error: " "
And that's literally it.
I figure this is because Steam is somehow getting in the way. I disabled the steam in-game thing as well.
Does anyone know what's going on here?

If you disabled the steam overlay thingy, then steam probably isn't your problem.

It's suggested here that you might have set an option in MGE that your graphics card doesn't support. I've no clue which that could be though.
http://sourceforge.net/apps/mediawiki/morrgraphext/index.php?title=Global_Graphics

I fixed it, ansiotropic filtering was on 16x which my card did not like much.
But now I am encountering errors in the MSG editor and I believe I set my pc to "good" when I should have set it to "moderate", so I am getting some bad framerates. Is there any way I can change that?

You can try disabling some of the optional Shaders. Or reducing the amount of grass, I keep mine at 50% personally, any higher and FPS dips a bit to low for my tastes. Set the FPS limiter to 60, Mipmap LoD bias to 0...there's probably some other things you could do that I don't really know of. I'm not even sure if those last two really help much.

The biggest FPS hits come from distant land I think. I have mine reduced to 3 cells with fog ending at 2 cells, mainly as not to ruin the vanilla Morrowind atmosphere, but it really helps with FPS as well. I hear 4-6 cells is decent.
You could also try running the Distant Land Creator again and lowering the Textures.

Well, the render creation error is back after I tried to start it up again. I have no idea how the hell it would work after I changed a setting, then not work the next time I try to set it up.

It's strange you're able to get it working intermittently. =S
I do think it's something that was turned on in MGE, but as to what that might be, i've no clue.
You could try setting everything in MGE to lower/less demanding specs and see if that works, and slowly turn things up if it manges to work that way. Also check to see if you can update your video drivers I suppose if you haven't done that already.

Last thing I can think of trying following through with your idea of setting MGSO to install with moderate settings. I know it's annoying to go through all of that again though.