Morrowind is the hardest game I have ever played, and if it were not for these helpful tips and tricks I discovered I would have never survived my first mud crab encounter. Without this tips you will find yourself dying over and over again from the same dungeon dwelling jerks. I have listed them from most to least important.
1. Be Quick. There are a few ways about becoming the fastest person in Morrowind. I recommend snagging the boots of blinding speed. These are mystical boots that increase speed 200 points and blinds you 100 points. They can be found in the West Gash region, specifically along the road south-west from Buckmoth Legion Fort. Trust me you need these boots (Tip Argonians and Khajiits cannot wear boots sorry). Counter act the Blindness with a potion or resist magic spell. You also do not need to create a resist magic spell 100%. It is much easier for lower level characters to cast multiple resist magic spells like resist 50% and resist 50%. This speed will make traveling the Morrowind world much easier and you will be able to outrun almost every enemy.
2. Decide What you want from the start. Character creation is the hardest part of the game. From the beginning you must decide if you want to hack and slash, sneak and assassinate, or fly and rain fire on your enemies. I highly recommend you check out all the character types before you choose one. I created at least seven characters before I decided to stick with one. My favorite is a wood elf archer with extra sneak. Sneak is a great thing to level up because you do 2x damage when you hit an enemy in sneak mode, very easy to do with a good arrow.
3. Save often, and under many files. Morrowind is the definition of a sandbox game. They literally cut you loose and allow you to kill anyone. This is great freedom but you don’t want to accidentally slaughter a town and find out two weeks later that you can’t complete a quest because the man you are supposed to speak to died by your hand. Use lots of files and save before making any big decisions.
4. Steal whenever possible. Life’s tough sometimes and potions aren’t cheap. As long as your sneak indicator says you are invisible you can steal without consequence. There is one extremely important thing to note when you steal, do not try to sell it back to the store you just robbed. He knows his own merchandise and will report you to the authorities. This doesn’t mean you can’t go down the street and sell his stuff to other people.
5. Learn to fly. There are many ways to fly in the world of Morrowind. The easiest I believe is to make a levitate spell. In the beginning you can use it by casting it over and over. Flying allows you to bypass mountains and obstacles that would frustrate the hell out of you. Just be ready to fight a cliff racer every 45 seconds.
6. Talking mud crab. There is a crab to the east of Vivec city that speaks and sells merchandise. This crab is very special because he will have up to 5,000 gold every day. This gold can be traded for items that you discover and collect.
7. No one else steals. The entire game can be used as a storage device. If you drop something somewhere it will remain there for the entirety of the game. Use that to your advantage.
I hope these tips and tricks help. One website that I found really helpful while I was playing was Morrowind check it out, it has a lot of great information.