Well, I know many of you have played Morrowind and loved it.
I just picked up the last copy of the Game of the Year Edition at my local Best Buy and am wondering what are some must have mods for the game?
I'm looking for a good texture replacing mod and any other mods that you think make the game a better experience.
Also, I've heard Better Bodies is a good mod to replace the NPCs in the game, anyone who has used it have any opinions on it?

Better Bodies is a must. If you find the faces ugly you will also want the face add-on as wel (Better Heads or something). There is also a separate project for Khajiit and Argonian bodies, although note that the last time I used this it had full upper body nudity for Khajiits (no underwear option like Better Bodies), and most Khajiits in the game are naturally topless so you will see this often.
Unless you particularly like the way levelling is handled in Bethesda's games (Morrowind, Oblivion and Fallout 3 are basically identical in this regard) you will want a levelling mod (I used Galsiah's Character Development). This makes skills advance in an automatic, natural manner, rather than just earning generic points you can put onto skills unrelated to the very skills you used to earn that level up.
You will also want the Unofficial Morrowind Patch; this fixes many bugs and issues Bethesda never corrected.
You should also definitely get All Boat Ports and All Silt Strider Ports; these allow ports to take you to any other port rather than to only the ones on their list (which in some cases can mean long treks to find one that can go where you need to be). Travelling long distances costs a lot more, so it's still nicely balanced.
There are probably others, but these are just the ones that come to mind at the moment.

All of the official mods are pretty good. In addition the mods I use that I consider close to essential are:
Book Rotate: allows you to place books in one of three positions, rather than only the default "lying down" position, so you can put them on shelves.
Delayed Dark Brotherhood Attacks: You won't be attacked by an assassin until a few levels. Even worse than dying is the fact that should you win, the armor is just too good at that level.
Modman Windowlights: Lights up the windows of buildings at night.
Passive Healthy Wildlife: It becomes a bit tiresome being attacked by every beast in the game. Certain beasts that are described as aggressive in in-game text still attack you, as well as diseased and blighted beasts, but the rest leave you alone, including the infamous cliffracers. Even at that, you won't have a shortage of aggressive wildlife.
You may also need the Ring Texture fix. I can't remember if that was ever fixed in a patch. If not, most of the ring in the game will appear black.
I think my wife uses the Better Bodies mod. She used a replacer mod of the NPC faces but got tired of playing "Land of the Supermodels."

Thanks, I'll check out Better Bodies and some of the other mods.
Any more suggestions?

Been a while since I dug through my many GB of Morrowind mods.... so let's see.
For a texture replacer I'm partial to Mixed Textures. It combines textures from several texture packs (basically assembling the best of the best), and keeps the same general appearance and feel as the original game while vastly improving texture quality.
A lot of the other texture replacers I used seem a bit hard to find (lots of older Morrowind mods just aren't hosted anywhere), so I'd recommend browsing through either TES Nexus or Planet Elderscrolls for things like weapons, armor, and faces. I did find Better Heads, however, which I'd definately recommend. Better Bodies is also highly recommended.
A couple other mods I'd highly recommend:
Unofficial Morrowind Patch: self explanatory
Morrowind Advanced: Boosts difficulty a bit by tweaking leveled lists, adding some new creatures, etc. Very balanced and well done.
Combat Enhanced: Greatly, greatly improves the combat mechanics of the game. Requires Morrowind Enhanced.
Morrowind Graphics Extender: If you're going to have great textures you might as well up your view distance.
Less Generic NPCs: Gives a bunch of NPCs unique dialogue as opposed to everyone having the same things to say.
Galsiah's Character Development: Overhauls the leveling system so you can just play the game rather than powergaming to get those 5x multipliers.
Morrowind Comes Alive: Adds a ton of NPCs through the game to make the world feel much more alive.
Also, while not must-have, a few high quality quest mods I'd highly recommend:
Suran Underworld
Illuminated Order
Lothavor's Legacy
White Wolf of Lokken Mountain
EDIT: I'd also recommend TESTool for merging leveled lists (something you need to do when using multiple mods that modify the same leveled lists).

Lock Bash Enhanced allows you to break open any locked chest/door/window/etc. with your weapon; bashing a lock has a heavy stealth penalty and counts as an illegal act if you are caught doing it to an owned lock, and the effectiveness depends on your thief skills and the weapon used. Lock Bash's modifications are applied to the global objects themselves so any and all native-model doors/chests/etc. used in mods can also be bashed open. The locked object creaks and shakes when being bashed, ending up slightly off-center when broken, which is a really great effect.
If you like the idea of robbing people's houses, the Role-Playing Classes (Stealth Pack) mod lets you go in and out of houses through the windows, giving you more options when breaking in or escaping from enemies. If a house's doors are locked the windows are also locked, so they have to be picked open. I don't recall if the windows are compatible with Lock Bash or not.
Morrowind Bandits Unlocked and Morrowind Cities Unlocked resolve the problem of NPCs having locked chests etc. but usually not having any keys to open them; these two mods add keys for each and every lock in the game, including the two expansions. The keys are often in the owners' pockets, but on many occasions they are hidden behind books or on top of the door frame or in other logical locations, so you can't just kill or pickpocket any given NPC to get easy access to his possessions.

I use Betterbodies2, Better Clothes, Slofs Beasts, a couple of ones that fix bugs and correct dialogue, one I made years ago, to cope with a few really obscure issues and quest conflicts. Along with the Morrowind Graphics Extender.
I never got into anything that really expanded the game, just beautified it a bit and fixed the bugs.

Same here. All the official mods, MGE, Better Heads/Bodies, Real Signposts, and Morrowind Code patch. Anything too game changing and you aren't playing Morrowind anymore, you're playing a halfway-decent Frankenstein game.

Frankly, I would reccomend you play without MODs for the first time, only with some graphical ones, so you can find out how's vanilla Morrowind and then go to, say, TESNexus or Planet Elderscrolls and find yourself things you miss in the game or just... Need for yourself.
As an addition to those graphical MODs you should probly find Atmospheric sound effects as well - that plug-in is great, it adds so much by just adding a few sounds to the game.

A few more recommendations!
Balmora Expansion- It adds a slew of new places to Balmora. I suppose the increased requirements while in Balmora aren't a problem anymore.
Dynamic Magicka Regeneration- It makes your Magicka replenish, based on your various, magic-based stats. Definitely worth checking out if you care to use magic.
Seyda Neen Complete- Expands Seyda Neen with some cool new buildings and NPCs. In my experience, it is a bit buggy, but still worth using.
Sleep or Suffer- Makes sleeping a necessity, with nasty effects of sleep deprivation.
Creature pack- Adds interesting new enemies to fight.
Atmospheric Sound Effect- This is one of those mods that don't change the game play itself in any way, but are terrifying additions to Morrowind. It does a great job of creating the sonar illusion of a living world around your character. (EDIT: I see Fenixp suggested it while I was typing :))

If you have some spare time, take a look at this list.
It has some of the best mods (known and less known) split into groups with descriptions, some basic compatibility notes and is very helpful overall.

Great thread.
I was just asking for something like this on another forum, but you beat them too it with a few hours :D

I'd highly recommend better bodies, better faces (it just makes faces not look like they're from the 90s) for better NPC looks.
Unofficial Morrowind patch essential, Morrowind Graphics Extender is also basically essential, allows for higher settings for graphics than original game, lets you take advantage of newer rigs and make the whole game look a lot better.
I recently re-installed and am running with those, as well as
Where Are All Birds Going? (adds birds, sorry don't have links as I'm at work)
Children of Morrowind (lovkullen.net/Emma/kids.htm). Adds children as NPCs in town, makes the world seem more alive but doesn't mess with gameplay.
Morrowind Comes Alive (adds more generic NPCs around)
The Lighting Mod (makes light sources more realistic, flickering, etc. Also makes caves/indoor areas much darker and makes torches/lamps required to see anything, and makes them work in a more realistic fashion. Gives a great atmosphere boost IMO, but if you don't want to mess with light all the time, skip it.)
i have some more, but I don't remember them all, the other ones are minor like adding cows and chickens to the world (and some other random animals) with Cait's Critters Unleashed...

I'm suprised that no one has suggested a Mana Regeneration mod yet. Playing a spellcaster is a real pain in the arse without that, let me tell you...

I advised Dynamic Magicka Regeneration - I think it does a good job ;-).