Hi, I've been trying to play this Telvanni mod but I keep getting errors. The new meshes/textures just don't want to load. an exact error:

Model load error
Meshes\RoHT\DG-WT_Circle256.nif cannot load file in
Meshes\RoHT\DG-WT_Circle256.nif will use default object marker_error.nif

It's a clean version of morrowind, without any other mods. The readme file says I can just unzip the files into morrowind/data, but when I do so, the .esm file does not appear where it should. Is there another method I should be trying?

I would recommend reinstalling Morrowind and try to unzip the files again.
Make sure you copy your save files before attempting this.The save files
can be located in C:\Program Files\Bethesda Softworks\Morrowind\Saves.

There is no need to reinstall Morrowind.
But if you're using Vista or Windows7, (and it sounds like you are, if the esm is not appearing) you should http://www.gamesas.com/index.php?/topic/781497-vistawindows-7-problems/page__p__11352753#entry11352753.

Never unzip directly to the Data Files.
A manual installation of every mod (or use the Wrye Mash Installer tab) is the best way to install mods.

It look indeed like a incorrect installation of RoTH. always unzip your mod in a separate directory and in a specific file for each mod since each modder zip their own files differently ( some zip just the esp/esm and the associated files, other zip under Data File or even Morrowind/Data File).
It also help a lot to keep a clear history of your mods and prevent your game folder to be polluted by 50 different readme.

I unzip in a separate folder, then I open Morrowind/Data File in another view and I drag and drop each files or folder in is own destination : esm/esp in data file, the mod's meshes under Morrowind/Data File/meshes,etc...

The manual installation allow you to kown what file go with witch mod and allow you to made your own decisions when a same file ( meshes or texture ) is altered by two differents mods. It happen often...