This is not meant to be a tutorial for adding bump and reflection maps to models for Morrowind. If you are looking for a tutorial for this try searching the CS forum or perhaps google.
This is intended to be a repository for tips and tricks for using this method, and how to tweak the different aspects to get the results you are trying to achieve.
Required tools:
1) Nifskope
2) An Image editing program that has a DDS plugin with a normal map filter, or any other program that is capable of creating normal maps. Photoshop, The Gimp, Paintshop, Crazybump, or the like.
Suggested tools:
1) Sceneimmerse
2) MCP 1.7 and above
NOTE: Please forgive me for my lack of techinical knowledge. I will try to explain things as best I can.
Before we start I would like to give credit to Painkiller_Rider and Phijama who taught me some of these tricks, 2 or 3 years ago.
Filter Mode
First I will start out with "Bump Map Texture"> "TexFilterMode." This can be found in your "NiTexturingPropery"> "Block Details."
By default the filter mode is set to "FILTER_NEAREST_MIPNEAREST" which is apparently not a very good filter mode to use. Your normal map and reflection map will come out pixalated and just look bad in general
Instead the suggested filter mode would be "FILTER_TRILERP." Over all, this will give a better result.
Controlling reflection intensity and final appearance with the reflection map alone
Knowing how to create a reflection map and having a basic idea of how it might look on the object before applied can save you a lot of time tweaking.
Below are some examples of different reflection maps, how they look applied to a sphere, and rendered in sceneimmerse.
http://img.photobucket.com/albums/v217/AnOldFriend/Concepts/ReflectionMaps.jpg
Reflection maps like any other texture is applied and tiled accross your object based on the UV mapping. Hot spots on your reflection map (bright spots on the reflection map) will vary depending on your UV map, the model's geometry, and the normal map especially.
Below are some examples of the same reflection maps applied to the shpere but with a rather gritty normal map.
http://img.photobucket.com/albums/v217/AnOldFriend/Concepts/RefWithNM.jpg
As you can see the reflection maps look a bit different when applied over this rough normal map. The hot spots defined in the reflection map are less apparent and the reflection effect conforms more to the contours of the normal map.
Next up is adding colors to your reflection map to portray a different type of material; gold, silver, bronze, and so on.
The examples below may be a bit extraordinary but they are this way only to better illustrate the idea.
http://img.photobucket.com/albums/v217/AnOldFriend/Concepts/ReflectionMapsColors.jpg
Using black and shades of grey on normal maps to control reflective intensity
When you apply a solid black color over a particular area of your normal map it will exclude that area from the reflection map's effect. You can also use gradients to control the intesity.
Below are a couple examples showing the basic idea.
http://img.photobucket.com/albums/v217/AnOldFriend/Concepts/NM_Exclusion.jpg
This can be put to some clever uses. You can select certain areas of your object to have a shiny look while the area around it is matte. Or you can define areas that will have full reflective intensity while cracks and crevices are excluded and the reflection intensity has a controlled falloff towards these areas.
Controling reflection intensity in Nifskope
Aside from all that there is one other way that I am aware of to control the intensity of the reflection map. In Nifskope "NiTexturingProperty"> "Block Details"> "Bump Map Luma Scale" is set by default to 1.0000. Raising this number will make the reflective material more bright and lowering it will do the opposite.
I will try to update this with some better examples of ways to use these techniques, and possibly other similar techniques at some point. I just whipped this up real quick to help people who want to learn.
If anybody would like to add some information about gloss maps and some ways to use them, please do share.