So I downloaded MGSO today and when I tried to run the installer for it, it says 'Could not create folder "C:\Program Files (x86)\Bethesda Softworks\Morrowind\mcpatch". Access is denied'.

Can anyone tell me what to do or how to get around it?

I'm EXTREMELY new to mods and this was the first one I've downloaded and tried to work with until I ran into this problem. I might need extra explanations for somethings.

Having Morrowind installed in Program Files causes problems with mods. You should move the game elsewhere, for example. C:\Games\Morrowind.

Minamir is correct. WIndows 7 and Vista 64 bit operating systems will not allow programs to write to files (patch) that are inside the Program Files (x86) directory. In fact, you are likely to have the same problem if you have Morrowind installed in *any* system directory.

Please do as Minamir suggested or uninstall Morrwoind and reinstall into a directory such as Minamir's example.

Even if you decide not to run MGSO, you will not be able to use the Morrowind Code Patch unless you move the game.

How do I install it to a different directory?

You need to move Steam or its Morrowind subdirectory, http://www.gamesave-manager.com/ works great if you're a noob, if not just google symbolic links and let your inner nerd shine. If you have a pre steam version just uninstall and install wherever you like.