I have a Sapphire Atlantis Radeon 9600 Pro 256MB, 2.53GHz P4, and an intel motherboard, and Morrowind kept crashing on me. As soon as I tried to open the boat's hatch at the beginning, my computer completely locked up. I tweaked and tweaked and tweaked until I found something that worked: Switching out of full screen. I don't know WHY that would make a difference, but it did. I hope it'll work for somebody else, too.
J²
J²