EDIT: Going to rephrase this a bit.

OK so...I'm having a hard time with this Khajiit head replacer.

The one I used, caused several errors or a crash in my game when I tried it. It was this one, actually http://mw.modhistory.com/download-42-15171

How do you install it correctly? (Manually placing files. I have the Steam Version of the game)

http://www.nexusmods.com/morrowind/mods/43110/?

Hmm, wait. So this mod crashed your game? Maybe you should post the errors you encountered. Others have used this mod successfully.

I use the mod you linked, but version 1.3, as 1.4 update added heads for other khajiit breeds and since I use Westly's Khajiit diversity, I did not like that change. I have never encountered problem with 1.3.

Can't remember exactly. Something about missing textures? I'm not sure. Then the faces would all blend together.

There's a pluginless option that only replaces the vanilla heads. That should work with Khajiit diversity.

Yes, but I like the plugin changes in 1.3