I'm not sure this is the best place for this topic but here goes...

Whenever I load mods in the GECK most if not all of the esp files are read as masterfiles according to the status tab.

How do I fix this?

If is this is wrong place for this thread then move it please.

Did you use FO3MasterUpdate?

Yes, I forgot to mention that.

The whole point of MasterUpdate is to make plugins into master files.

You need to run MasterRestore in order for GECK to be able to sensibly deal with them.

What is a master restore?
How do I do one?

Simply make a copy of FO3Edit.exe, and rename it to MasterRestore.exe.

I don't know if it would make any difference, but mine is named FO3MasterRestore.exe

Thanks for the help everyone.