...Ahh... but don't stop at Morrowind, there were Daggerfall before it and Arena before that.
I did play both Arena and Daggerfall shortly after release. Oddly, after initially liking them, I found both games rather boring. They gave you a huge world to play in, but it was so generic that after a while I kept getting this "been there, done that, got the T-shirt" feeling no matter where I went and what I did. Actually, I planned *not* to buy Morrowind because at that time I've lost my hopes that Bethesda could produce a game that I'd find engaging for a longer time.
For me, Morrowind is the game where Bethesda hit my personal taste pretty well. I loved the gritty exotic atmosphere, the massive amount of dialogue and background information, the ambiguity in ethics and politics, and the huge amount of quests.
Arena and Daggerfall had a more generic atmosphere, barely any dialogue at all, and only a couple of quests (50?) - after a while you'd seen them all. I liked them for a while, but as I said, I got bored relatively soon. The games certainly do have an appeal as graphically sophisticated quasi-roguelikes, but then again, when I want to play such a game, I rather choose one of the "real* roguelikes because of the more complex gameplay. Also, while the dungeons in Daggerfall were large, they were also incredibly convoluted and not at all believable. The engine randomly threw together everything it had available - I always ached when I found a complete house or barn interior buried several miles *underground*. How the heck was that supposed to get there?
I still like the character generation in Daggerfall though. I was a bit sad that Morrowind only featured a reduced set of skills, no disadvantages like phobias etc. Also, Daggerfall probably never lived to its full potential on my machine because it was (and unfortunately still is) extremely buggy, and that was at a time when patches were much harder to get than today. For example, I never got far in the main quest, because the bugs always locked me out of it. So I never experienced the many alternative endings of Daggerfall's main quest, and I think that's something I would have preferred over Morrowind's single (although differently interpretable) ending.
The biggest difference, however, is the moddability of Morrowind. Daggerfall had a mere handful of mods. Morrowind has about 15,000 - and people still produce new ones. Some mods easily equal an offical expansion in size and quality. I enjoyed the unmodded game immensely, but the mods are what keeps me still playing.