So, I got Vurt's Groundcover yesterday, installed, it started up game and thought "wow, this looks great!"

Until I tried to walk through this nice-looking grass and found it to be a solid object. What the hell? What did I do wrong?

The esp files are dummies to be used in distant land generation-- you should not have them enabled for your game.

Which it clearly states in the ReadMe, so what you did wrong was not pay attention.

The esp's need to be enabled in MGE Distant Land setup, but not enabled in your Morrowind launcher. (or wrye mash)

I thought of that and so turned them off. I've already loaded them into the distant land generator. I turned off the esps in my data files list and tried again. They just didn't show up at all.

@ - (copy,paste ) Caerendevwin: simply re-run MGE's distant land wizard. This time, do not skip create distant statics! - load Morrowind without the pugins. You should now still see the grass - only this time 'round, it's animated!
If you see Vurt's grass sway in the wind, you can walk through it