OK really stupid question here. I have better heads installed and it works fine. But when i am using cs it shows vanilla heads, so i have no idea how my npc will look like in game. Is it possible to make cs show better heads models while modding so i don't have to launch game a zillion times just to decide on npc haircut?

Just load the .esm (or multiple ones) that come with the Better Heads mods alongside Morrowind.esm

Uh, that will make my mod dependent on better heads, won't it?

Yep. The only other option is to install Nifscope and open up the hair meshes in there. What I suggest is to load up better heads, find a hair mesh you like, untick BH, then add the hair to your mod.

To avoid making your mod dependent on Better Heads, use TESDTK to convert its .esm into an .esp and load CS with this .esp selected (but inactive). For a game, keep using the .esm.