Single-core 1.8ghz Athlon 64, Nvidia 8800GT, 2GB RAM Win7 x64

Drivers are updated and I don't have anything significant running in the background. Without mods, I get under 30 fps in towns at 1280x960 with the settings maxed. Is this normal?

Thanks

Sounds normal, yes.
I'm not a pro at specs, but in my experience Nvidia is not that good with Morrowind.

There are many tricks you can do to boost performance....

- In the Morrowind.ini file, set Max FPS=240 to Max FPS=60

- Disable shadows from the Menu (they look ugly anyways)

- The http://planetelderscrolls.gamespy.com/View.php?view=utilities.detail&id=22 has options to help stabilize FPS.
--- For example, you can control the Fog with your Mouse Wheel to stabilize FPS on the fly.
--- You can also improve the in-game cursor by "accelerating" it.
--- No need to launch MW from it, as long as it's open behind the game it will do its job.

- The http://www.tesnexus.com/downloads/file.php?id=19510 will help with overall stability. It won't really help with FPS, but it's pretty essential.

- Many people find an increase in performance after applying the http://www.ntcore.com/4gb_patch.php to the Morrowind.exe (apply after the Code Patch)

- In the in-game menu, make sure your Music isn't fully muted (ie, all the way to the left.) Fully muted causes problems, so leave it at least one notch to the right if you're trying to mute it.

- Play in Full Screen, not Window mode.

- Try lowering the resolution to 1024x768


Hopefully some of those will help. My laptop is not very strong, but these things helped me keep around 20-30 FPS even in Balmora with mods. And keep in mind that the game is still playable at anything above 15.

Morrowind is more CPU driven then most newer games which rely a lot on the GPU. Your framerate is limited by processor. That being said unless you have a very fast CPU (around 3.5+GHz but CPU architecture also matters) you aren't going to see very high frame-rates, especially in towns.

Your system should get 15-25fps in town (maybe less in very large towns like Vivec) and 20-40fps in the wilderness.

***

Changing the resolution most likely won't help as the graphics card is processing everything fine, but the AI and other scripting is a burden to your CPU.

The 4GB (large address aware) patch is only useful if you have more than 4GB of RAM (on an 64-bit O/S), but as stated this isn't your problem. Morrowind only needs more RAM when you start adding mods.