I'd like to see some things where the vendors behave a little bit more dynamically.
* Stuff you sell to vendors should disappear from their inventory over time as they sell it off to other customers (perhaps some of the inventory gets sold to other vendors, so shows up in the other vendor's inventory).
* Stuff like potions, alchemy ingredients, arrows, etc. shouldn't respawn immediately, *but* if there's stuff the vendor is consistently selling out of, they should increase the amount they have available for sale the next time they respawn (yes, I know about the trick of selling stuff back to a respawning vendor to increase inventory, which is convenient for the player, but doesn't seem very immersive as a game mechanic).
* If there are vendors you do a lot of trading with (particularly if you have a low mercantile skill, so that the vendors are getting 'great deals'), the vendor should, over time, get richer, and so have more money available to buy stuff from you. Conversely, if you have a very high mercantile, perhaps the vendor gets poorer over time because you are taking advantage of him/her.
* There should be some vendors (other than Mudcrab and Creeper) who are rich. It would seem like there would be at least a couple *very* rich merchants in places like Vivec city, Sadrith Mora, Ebonheart, and Mournhold. I always thought it was stupid that the only way you could find a rich merchant who could afford to buy high-end stuff in Morrowind is to go to merchants who *don't even have mercantile*, so that Mercantile, basically, doesn't matter in Morrowind because the best merchants give you full price all the time. Mudcrab should probably be removed from the game, and Creeper should have his 'starting' gold reduced to like 1500 maybe. (The only reason I *use* Mudcrab at all is because there isn't a single rich merchant in the game). There should seriously be a *human* merchant or two who start with 10k or 15k gp, and increase as you do business with them).
* High end weapons/armor and enchanted items should probably have their values reduced to something a little more in-line with the price of everything else. Sure, an enchanted Daedric dagger should be worth a lot of money, but something like 15000 for the *very best* items in the game would probably be a more reasonable value (right now, some high-end enchanted weapons and armor can be worth 200 000+). An unechanted Daedric dagger, for example, is worth 10000gp in the original, unmodded game. Seems like it should really be worth more like 1500 or 2000gp.
* Filled high-end soul gems (Grand, Greater) should have their prices reduced (maybe 5000 for a filled Grand, and 2500 for a filled Greater or something like that), but to go along with that, most enchanting vendors should be pretty rich and be able to afford to buy them from you. (Of course, such a mod would need to also modify the enchanting system in the game, since Constant Effect enchantments require a soul gem worth 80000gp or greater, but that seems like you could fix that simply by resetting one constant value in a formula somewhere).
* Enchanted items should have their value increased by enchanting (Yes, I know Morrowind Code Patch actually has that as one of their 'fixes'), but to go along with the general price reduction, you wouldn't get such astronomical prices for adding enchantments to things - maybe 1.5x or 2x the value of the soul gem used to create the enchantment; so, perhaps enchanting something with a Grand Soul Gem worth 5000gp would add 7500 or 10000gp to the price of the item). Of course, this also means that the price you have to pay NPC enchanters to create enchanted items should probably come down too (though it should still be expensive enough to make the enchantment skill 'worthwhile').
* Perhaps over time, the prices of things would fluctuate in response to the changes in supply/demand that the player introduces into the economy. For example, as the player raids Daedric shrines and starts selling off a bunch of ebony and daedric items to merchants, maybe the prices of that type of gear comes down 30%-50% to reflect a sudden influx of a previously extremely rare item (it would still be pretty lucrative for the player, but instead of getting 5000gp for a Daedric dagger, for example, maybe after they've sold 10 or 20 of them, maybe the price drops to like 3000gp - still a pretty nice payday, but reflects the reality that the player is making those items less rare, and the market demand is starting to become 'satisfied').
This effect of the price of things going down might be mostly a local occurance, so that selling a lot of one type of item in one town depresses the price substantially at all the vendors in that town, but go to a different town and the price would still be pretty high. Maybe if you don't sell in a particular town for awhile, the value starts to go up again.
* Maybe as the player starts selling this stuff into the economy, it starts showing up on local guards, governors, nobles, etc - this could introduce a sort of 'levelling' aspect to the NPCs so that, as the player gets more powerful, and selling off equipment, it starts to have an effect on the world. (Guards start out as very hard, of course, for the player character to defeat, but usually seem to become pretty trivial for the player to defeat after a certain point; I find a certain amusing irony to the idea that as you sell off good equipment to get money to improve yourself, that good equipment will end up in the hands of people you *might* end up fighting.