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I had this problem too, if you look around on the internet you can find the answer, its an easy fix. All you need to do is run dxdiag and make sure that AGP Texture Acceleration is on, it is under display. You need to install or do some certain things if it is grayed out, post here again or look on the net if you cant figure it out. It fixed the problem right away for me, but I played morrowind on Xbox, didnt get to far on PC since I had played it all before on Xbox. Morrowind is a great game though, kinda like an MMORPG without all the annoying people, though at times i wished real people were in the game.
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