The challenge is simple. It's based on the real life idea that the circumstances into which a person is born is completely beyond his or her control. So what if the Elder Scrolls was the same way? What if we let a random program take over for us, much like the forces of chance and natural selection, and choose our form?
http://www.random.org/ (I used a very basic program that only picked a random number. I rolled four times on a sheet of paper. I rolled for race, gender, class and birth sign.)
Gender obviously has two options, male and female.
http://uesp.net/wiki/Morrowind:Races Put them down on paper in any order you wish. The first randomly generated race is the one you play. That's the nature of the game.
http://www.uesp.net/wiki/Morrowind:Classes They're listed at the UESP. Default classes only. I know some of them svck. That's part of the nature of the game. It's a challenge.
And finally we have the http://www.uesp.net/wiki/Morrowind:Birthsigns. 13 of them for whoever is keeping count.
All random. Literally roll your character.
Your objective is to either complete the main quest, to reach level 20 or to rise to the top position of any guild. Even if you have the worst conceivable build of all time like an Orc bard or something.
Why? Because it's fun, different and interesting.
I rolled a female Orc pilgrim born under the Mage and I'm having a blast. She's on level 2 and just doing some low level quests in Balmora.