From what I understand, TWMP has a lot of potential with all it's new space that is under-used. With permission, would it be a good idea to move villages from mods (http://oblivionsrealestate.com/Find_A_Home/Villages/villages.html) into TWMP? Of course, if the villages have quests, that might be a bit more complicated to deal with...

I don't see how that would ever be a good idea. Village builders like myself choose the locations we build them in for a reason. They're meant to integrate into their surroundings. Transplanting them would almost certainly result in everything being badly out of place. Even if there are no quests involved. I can't see someone being able to secure permission for a project like that.

In the end, it would be easier just to build new villages in the expanded areas that fit in with those areas.

That's too bad. There are so many cool villages, and only so much space in Cyrodiil. If only TWMP was released sooner so people knew they had more area they could mod in...