Post about your mods, learn about OpenMW mod compatibility, check for problematic mods, discuss issues, and give us feedback about your experience with modded OpenMW.
OpenMW is an open-source cross-platform (Linux, Mac, Windows) rewrite of the Morrowind engine. You simply point it at the location of your original Morrowind files and you're all set. Because it is open source, it has a bright future. The closed-source client is limited in the ways it can be maintained and modded, so it will likely fall into disuse as OpenMW becomes more full-featured (shadows ...
OpenMW is really awesome, but many mods need Morrowind's original engine with the Morrowind Script Extender to work, so they can't be used with OpenMW which is a problem. Also adds different bugs compared to the original, but I have had no trouble with it.
OpenMW is great for your first playthrough, and it has way better performance than MWSE. There are also some impressive graphical shaders exclusive to OpenMW, although MGEXE (the graphical component that comes with MWSE) isn't far behind these days. If you plan to mod, MWSE is, in my opinion, the better choice by far.
The main difference is MWSE (Morrowind Script Extender) which is part of MGE XE. This allows for considerably more ways to hook into and access Morrowind for mod scripts, than what can currently be done by OpenMW (or regular Morrowind). MWSE fairly recently (a year or two ago?) got support for Lua (a programming language). Quite a number of MWSE mods have been updated to MWSE-Lua mods. I ...
OpenMW does have a LUA branch in testing though so it's only a matter of time. Multiple data folder support is something that OpenMW supports, and it's amazing. What is it? Well, in Vanilla Morrowind, you would just install all your mods into the Data Files directory, then select them in the launcher (if they were an esp/esm/bsa), and play.