It'd help to have an idea of your priorities. Is your focus mainly on quest mods themselves, or on other mods to let you enjoy the experience? How important do you consider balance / challenge? Is this as important to you as more interesting / unique / non-linear content?
I'd certainly suggest looking at Empirical Morrowind, as well as Tele's list. Bear in mind though that Tele's list doesn't include all the best mods, and you certainly can't use them all at once. It's more targeted at letting users find most of the best (and well known) mods - hence the links to one or two mods from many different sites.
You might like to check out this thread:
http://www.elderscrolls.com/forums/index.php?showtopic=85560&hl=
It is mainly focused on difficulty / challenge, but it also covers some balance issues. It does give a good idea of how the mods described work together.
Getting good balance - particularly economy balance - is an uphill struggle. There are a fair number of mods to address economy: Seach for threads by Hotfusion4 and Piratelord to find quite a bit. However, it is difficult to keep things balanced once you start adding other mods. For example, most economy mods reduce the insanely high prices of some armor and weapons (and sometimes make the expensive stuff rarer) so that you can't make a fortune by selling it. Some ebony piece might be reduced from 15000 to 1000 for example. Add a new armor mod, and you'll probably find the prices fit with the old system, not the new one, so a similar piece of armor will sell for 15000 again. A few mods like this will quickly break your economy again. Either you need to avoid using many such mods, or you need to edit them in the CS to accord with your system.
Of course opening every new mod in the CS isn't an ideal solution, since you have to look through and check every item in a mod. This can ruin some of the mod's surprises. If you really want a balanced economy, doing this will be necessary - just make sure you've finalised your mod list before you do it. Going through and rebalancing half the objects in your game takes a long time. You don't want to do it twice.
If you're not too bothered about a balanced economy, then great - you just saved yourself a lot of bother. You can still get improvements without things being perfect though. Some economy mods will do things like: increase fast travel cost; increase inn cost; increase criminal fines; make merchants harder... These will all help even if you add mods without adjustment.
I haven't had much experience using mods since I started modding but here are some I'd probably use if I started playing (I've used most of these briefly with test characters). It's not a complete list by any means, these are just examples.
In no particular order:
Less
Generic
NPC mods:
Much more unique dialogue for NPCs in many towns (each town has its own mod). A few small extra quests. Generally makes NPCs sound like individuals. Conflicts aside (and I didn't find any, though I guess dialogue conflicts are possible) I don't see any reason not to use these mods. Check them out.
Magical
Trinkets of
Tamriel III or IV:
A lot of interesting, gameplay enhancing items. Not that well balanced though - certainly makes the game easier. I found it unbalancing (at least at early levels) when used alone, but I'm sure difficulty increasing mods could compensate. It's certainly interesting.
Balmora Expansion:
Lots of good stuff in this one, but it is a collection. If you're attempting to balance things - particularly the economy, prepare to tear out your hair. Otherwise it's good. Balance issues include stupidly high priced items - some stealable. Also the create-your-own-poison-arrows shop is interesting, but not at all well balanced.
A purist would certainly opt to pick and choose the individual pieces, rather than going for a collection like this. However, if you want a load of new stuff without too much effort, it's worth getting. FPS will suffer though.
Better bodies + Better heads / Changing faces / face packs... Texture replacers if your computer can handle them (mine mostly can't). All a matter of taste, and won't conflict with / affect other mods. Find some screens and pick the ones you like. If they're replacers, backing up original textures is probably a good idea.
Thepal's Unofficial Morrowind Patch:
No reason not to get this. It fixes a load of bugs in the original game. Inconsistencies, errors, broken quests... It's forever a work in progress - just get the latest version you can.
Taddeus' balance mods:
Worth checking out. If you're not going to spend ages finely tuning the balance, you should probably use them all. If you are trying to get the balance right, you might want to use only certain esps, or none depending on other balance mods. The only way to ensure really good balance is to fine tune things yourself. It takes ages though, so Taddeus' mods are a good idea if you're either not bothered, or half bothered.
Wakim's game improvements:
Similar deal here. Just use the whole lot if you don't want to spend long. Use some elements of the modular version if you want to be more picky. The ideal solution is to tune most of the GMSTs yourself in the CS - there are bound to be decisions you don't agree with in Wakims. Again, this'll take a while.
The full version of Wakim's comes with No-Glo [removes the luminous plastic effect from magical items]. If you don't get this here, get it (or something similar) elsewhere.
Necessities
of
Morrowind:
Sleeping + eating requirements. Cooking, recipes, shops, water supplies... I used this for a while and quite liked it, but some say it is too intrusive. It certainly doesn't stay in the background. I'd definitely suggest using some form of sleeping / eating requirements mod, but NoM isn't everyone's cup of tea. One gripe I have with it is that many of the foods don't fit with the environment: e.g. beef, chicken. Given that there are no cows and no chickens, I think this is unfortunate. Another problem is that sleeping times are fairly regimented - you must sleep for 6 hours every 24 hours. There is no continuous calculation though - everything is done daily. If you're playing a thief who alternates between nighttime activity (for general thievery etc.) and daytime activity (since many things aren't doable at night with e.g. schedule mods), this can get pretty annoying.
Alternatives include mods by Balor, Tejon and others. I haven't tried them, so I can't compare, but I imagine that they are simpler and less intusive. Hopefully more continuous too. Tejon has also made various other little gameplay balance / realism mods. Mostly quite simple, but useful nonetheless.
CharGen revamped:
Allows more control over character creation, with less annoying, slow dialogue. For me, the speedup is important, since I need to start new games hundreds of times when testing (I'd probably write my own character startup script if I had any sense, but clearly I don't). The main point is the increased diversity though: you get to customize your skill bonuses, and customize your attributes by single points. You can also choose your type of starting equipment, and starting location.
The process is basically the same as Morrowind, just better and more flexible. I think there are more exteme mods which e.g. implement a Daggerfall style advantage / disadvantage system. I haven't tried any of these though. CharGen revamped, along with more interesting birthsign mods is certainly a big step forward.
The
Lighting
Mod:
Adjusts the lighting all over Vvardenfell to be more realistic. Less ambiant light, more light sources. Dark pasages are actually
dark, as in can't see a damn thing. Torches and lanterns become necessary. Sneak modifiers are also implemented based on lighting conditions. Proximity to light sources reduces sneak, darkness increases it.
Some sort of creature/NPC addition / balance mods.
I've used (briefly):
Morrowind
Comes
Alive (with MCA names, to give the NPCs names):
It adds many NPCs (by comparison to the standard) all over the place. They are necessarily pretty generic, but some perform useful functions too. It includes The Undead (2.2 I think), and that does put some nasties around the place. However, it just makes things more sensible. Just because you are level 1 does not mean that the whole world should be full of candy floss.
You'll only meet a powerful zombie (or similar) either in the wilderness at night or in a tomb (I think). What does this mean? That if you're low level, and you want to go adventuring at night or in tombs - you had better be prepared. If you're not prepared, you'll end up dead.
Here, for example, is a list of items Hotfusion compiled for his setup as his "adventuring necessities" with a high-elf apprentice mage:
Full set of medium armor
Crossbow + bolts
Halberd
Almsivi/Divine Intervention Scrolls
Ranged Destruction Spell
Charm Spell
Command Spell (both versions)
Demoralize Spell (both version)
Invisibility (very important!)
Various Summonings (very important!)
In addition, I will need the standard gear:
All four teleport spells
Healing Spell
Alchemy Gear
Herbalist Training (very expensive!)
Various potions (obtainable through guilds)
Levitate
Water Breathing
Will all this be easy to aquire as soon as you start? Certainly not. To start with you'd need to keep to the open road, and travel only in daylight, or by fast travel (expensive with economy adjustments). Even then you might be unlucky enough to meet a relatively powerful adversary, so you'll need to have at least one teleport scroll, or other means of evasion. Otherwise you're dead.
I used Creature Pack 1.1 at the same time. Creature mods do make Morrowind more dangerous for low level characters, but that's as it should be. You actually need to prepare properly and think before you act. Thoughtlessly walking around in the wilderness at night without preparation will get you killed. This makes it that much more rewarding once you have the skills and items to cope. Starting life as an adventurer should not be a walk in the park.
I also use Morrowind Ecology. This probably makes things a bit easier if anything, but more realistic. Every guar is no longer out for your blood as soon as it sees you. Some animals will attack (e.g. blighted ones / nix hounds), but most will not. The distribution of animals in different environments is also more reasonable. Inedible bunnies asside, there's nothing wrong with it.
I haven't used enough House / Quest / Landmass / Companion mods to know much about them. There are certainly good ones though. I'd also want to try a load more gameplay addition mods.