I know you've all been wondering, "What are some random guy's opinion on the NPCs of Morrowind?"
Here I give you my opinion, one for each race.

Altmer

Name: Tyermallin
http://www.uesp.net/wiki/Morrowind:Tyermaillin
Why I chose him: Morrowind is seriously lacking in the awesome Altmer department, and this guy's a Blade.

Argonian

Name: Vistha-Kai
http://www.uesp.net/wiki/Morrowind:Vistha-Kai
Why: I don't know. I always liked him. Mostly because of how awesome Divayth Fyr is. Plus almost all the other Argonians are slaves.

Bosmer

Name: Tarhiel
http://www.uesp.net/wiki/Morrowind:Tarhiel
Why: He dies when you first see him, saving you the trouble of having to kill him yourself. (On your zealous Bosmer genocide.) And yes, that makes him better than all the other Wood Elves in Morrowind. There are other reasons I chose him, but "I don't want to talk about it".

Breton

Name: Socucius Ergalla
http://www.uesp.net/wiki/Morrowind:Socucius_Ergalla
Why: "On a clear day..." I can just hear his voice in my head right now. "Ah, yes. We've been expecting you..." Good times.

Dunmer

Name: Divayth Fyr
http://www.uesp.net/wiki/Morrowind:Divayth_Fyr
Why: He's awesome. He's the smartest guy on Vvardenfell, as well as being the oldest. Is obsession with Corprus is a bit... odd. But he's still awesome.

Imperial

Name: Caius Cosades
http://www.uesp.net/wiki/Morrowind:Caius_Cosades
Why: Cauis is cool. He's personality is enjoyable ("Go away and let me read") and he was my boss for a while. I just like him.

Khajiit

Name: M'Aiq the Liar
http://www.uesp.net/wiki/Morrowind:M%27Aiq_the_Liar
Why: Need I explain? Sure, he's better in the other games, but he has a nice hat.

Nord

Name: Forstaag the Sweltering
http://www.uesp.net/wiki/Tribunal:Forstaag_the_Sweltering
Why: Don't you just love easter eggs? I love his witch remark.

Orc

Name: Ra'Gruzgob
http://www.uesp.net/wiki/Morrowind:Ra%27Gruzgob
Why: Is there anything better than an orc who thinks he a Khajiit? No. One of the funniest NPCs in Morrowind, but I won't spoil him for you if you haven't met him.

Redguard

Name: Gentleman Jim Stacey
http://www.uesp.net/wiki/Morrowind:Gentleman_Jim_Stacey
Why: Redguards aren't commonly this awesome. I like him.


And there you have it. My list.

Splendid good list sir.

I've spent some time thinking on mine and they are:

Argonian: Vista' Kai, much the same as you but I like his "I'll kick your ass" attitude.

Kajjhitt: Ra'virr, he's the only honest trader I know.

Redguard: Neminda, I like her down to business style. She gets stuff done.

Altmer: Arrile, the first Altmer I knew, as well as his line of "The best goods in town" when he's the only goods in town.

Dunmer: Divyth Fyr, who doesn't like an eccentric old wizard with a curious taste for abnormalities?

Breton: Soccius Ergalla, Best man for his job.

Imperial: Larius Varro, I love his way of using anologies to get what he wants...

Orc: Ehh, idon't habe a favorite orc...

Bosmer: Fargoth, I love the look on his face when you double cross him.

Nord: I usually play as a nord, so no favorite.