Note: I have not read the Infernal City, so please excuse any ignorance this may have caused.

Partially out of my own interest, and partially to help develop my character's backstory in Skyrim, does anyone know what happened to the Great Houses after Red Mountain/Argonian Invasion? (Specifically House Redoran.) I know the surviving Dunmer fled to Solstheim, but I also know that there were few survivors, and that Ald'Ruhn was destroyed by Daedra. Would the Houses have dissolved during the chaos, or would they have set up again on Solstheim?

Also, a side question: What are the Redoran views on magic? I can't remember if this was addressed in Morrowind.

While not a master myself, yes Ald'Ruhn was destroyed. Pretty cool extra bit is that they revived the Emperor Crab during the battle if you didn't know that xD. http://www.imperial-library.info/content/fall-aldruhn

I don't know if there is any official info regarding all of the houses. I know that House Telvanni was destroyed but I'm not sure about the others. In that link it seems like they were destroyed but they may have just been really damaged and their base city was destroyed. Some members of the Redoran name may still live. I don't know if the Argonians actually invaded that far? May be mistaken.

The Great Houses seem to be in ruins, some nearly completly eradicated, their sole surviving heirs fled the country.

The Telvanni "heir" is said to be in Skyrim, you meet him in a quest. Him being in Skyrim is evident of a major catastrophe for the house Telvanni.

The political faction that formed in Argonia during the Oblivion crises, and succesfully defended that country is still in power. I forget the name, but they defeated the Daedra in Argonia, and then invaded the Oblivion portals themselves, proving strong enough to force the Dremora lords to close their own gates. The Argonians, now free of the Empire, invaded Morrowind, and reached very far in. The Telvanni succumbed, and we can only guess the fate of house Dres, the House nearest to Argonia, and the most prolific slaver-house.

If the Redoran resurrected a giant dead crab, then they must have used Dunmeri sacred necromancy. They are the House closest to the Temple, and would not have used otherwise. The House closest to the Temple would have had the skills neccesary for such a feat, too.

I read that all those with the name Telvanni are dead or most likely dead, is the heir someone of blood relation but not an actual Telvanni? I only know of the guy in Riften, who does not seem to have any ability to turn and become the leader of that particular house, and I heard someone in the college says they are of Telvanni blood or related somehow.

That guy is the last member of the Telvanni family, however, other sources indicate that House Telvanni is still alive. Presumably that means that the central / original family of the house is wiped out, but other families in the Great House have survived.

Yes, any gentrified aristocracy as old as the Dunmer Houses would have most definately formed colateral houses for these kind of events. It's interesting, however, that we never meet the "head" of House Telvanni, or any magelord with the name of Telvanni. If I recall, the only Telvanni we meet in the game are retainers or lower.

Iconoclastic as it is, perhaps it doesn't really have a blood lineage like Hlaalu did. Perhaps it's more of a congregation marked by attitude and aptitude in and towards the arcane.

Note that the heir goes "I'll never forget you". When they say something like that, it's almost always because they'll return to their ancestral homeland and become a hero of the people ;P

My prophesy says that this dark elf in Riften will take his old name in use, return to Morrowind and restore House Telvanni. Mark, my, words.

More likely he'll just become another of Master Aryon's puppets.