I play Skyrim on my PC using an Xbox 360 controller and it works fine and would LOVE to play Morrowind using and Xbox controller but it doesn't work for some reason. Can anyone offer any tips on how I might get this to work or if it's even possible? Thanks in advance!

Morrowind on the PC was not designed to use a gamepad. You need something like Xpadder. I also seem to remember that third party gamepads had better success on the PC version of the game.

But, you will lose your hotkeys, and the HUD on the PC is really designed for the keyboard and mouse. Also, you can resize all the menus, move them around, and pick and choose which ones you see when you right click.

Here is someone that got the 360 controller to work

http://forums.nexusmods.com/index.php?/topic/171416-how-to-use-a-xbox-360-gamepad-for-morrowind-pc/

Thanks for the link!