What does it mean? is it the order your mods are stacked in the mod list? do some mods not work if theyre below others?

I see the term a lot and dont know what it means.. I never use any more than 10 mods.

Almost. The list is in decending date order of the files. It is the order in which your plugins are dated.

The rule is "He who loads last, wins". Say you have two plugins that edit a particular piece of armor. The plugin that edits that piece of armor last in the load order will have its changes applied to the armor, not the plugin before it.

Mlox and Wrye Mash can show you and allow you to edit your load order by easily redating your plugins.

I know that very well.... Too bad there isn't a tool out there that will help you keep changes between plugins so you don't lose important things...

_{(Sarcasm if you aren't picking it up)}

Here is another aspect of a loadorder and that's what order your installed mods would be loaded by the game, which has nothing to do with the Game Files section in Morrorwind.ini file.

ok so load order is only important when you have two mods which might conflict? and the oldest dated one will not load when you play?

Yes.

No. The oldest will always load, but it will always loose if a conflicting mod has a newer timestamp (date, time) than the oldest one.