The creation in Daggerfall is MUCH better than in Morrowind and Oblivion, in my opinion. You have four sets of skills in the order of "primary", "major", "minor", and "misc". This allows your character much more control over the skills setup than in the newer games. It also seems like there are more faces to choose from, but these are 2D images, not the complex 3D models used in the newer games. On top of that, there's the questionnaire that adds points to specific skills and generates a character background automatically, which is pretty good. What's more, is that you can edit your player's special advantages, disadvantages, forbidden materials, forbidden armor types, bonuses, and almost anything else you can imagine. Finally, you get to roll and reroll your attributes until you get them to a satisfactory level.
Overall, the Daggerfall character creation process if far more advanced than anything in Morrowind or Oblivion, but can produce some awesome characters for your individual play-style. Best character-creation I have used since the days of the text-based MUDs.