Those players who are used to playing TES2: Daggerfall are going to be in for a long series of surprises. Most will be pleasant and some will be not-so-pleasant. If you played through Daggerfall, Battlespire and Redguard before launching in with Morrowind, most of what you are going to experience (from a game mechanics standpoint, anyway) will be at least vaguely familiar.
Battlespire was the key development in the area of game mechanics and Redguard was the key development in the area of graphics and 3D game play.
For example, in Daggerfall, your skills were only nominally controlled by your attributes. You could have a 30 in an attribute, yet be able to raise all of the skills associated with that attribute to 100%. In Battlespire, this problem was fixed such that your skills could be no higher than the attribute that controlled them. This has been partially kept in Morrowind. You may train a skill to the level of the controlling attribute, but you may only exceed that level by actually using the skill.
In Daggerfall, your weapons and magical items deteriorated over time, but nothing else did. In Battlespire this was fixed. Your weapons, magical items, clothes and armor all deteriorated with use. Unfortunately, being locked up with a bunch of crazed Daedra didn't exactly give you access to armorers and weaponsmiths, so you were pretty much stuck with finding new stuff to replace the old as it wore out. The problem of item deterioration continues in Morrowind, but you can not only find people to repair it, you can also repair it yourself if you have the proper tools.
In Daggerfall, access to a spell-maker allowed you to concoct spells using every effect in the game. In Battlespire, you were pretty much stuck with the effects you chose at the beginning of the game, but you could tinker with effects on the fly. In Morrowind, you are back to the spell-maker concept, but you may only use effects that you know.
In Daggerfall, every use of a skill worked toward increasing the skill level. In Morrowind, every SUCCESSFUL use of a skill goes toward the skill increase. This makes trainers much more valuable as low skill levels mean a proportionately lower number of successful uses of the skill.
The Morrowind trainers (they are much cheaper than in Daggerfall, by the way) do not train all skills required by a guild. Instead, they train only three skills. This means spending a lot of time tracking down a trainer for a particular skill. On the bright side, most can train to higher than 50%, though they are all limited to their own level of a particular skill, and there is one "secret master" for each skill that can train the skill all of the way to 100%. The trick is finding that master.
The Daggerfall merchants were very hinky. You could buy and sell virtually unlimited amounts of stuff, what you sold generally disappeared into some sort of black hole and the mere act of buying and selling developed your mercantile skill, even to the point of allowing you to buy or sell nothing. Not so in Morrowind. Merchants have a limited amount of money to work with and once it's gone, you're done. Items sold to a merchant typically remain with that merchant, so you can go buy back something you mistakenly sold. Your mercantile skill does not improve unless you successfully haggle, even if it's just over a single gold piece.
In Daggerfall, vampirism was a nuisance at most. You got super skills, super stats and were more or less able to operate as usual. In Morrowind, vampirism is actually a curse. Sure, you still get the super stats and skills, but almost no one except other vampires will talk to you. So it's almost impossible to do anything except vampire clan quests until you manage to get yourself cured. And you can only be a vampire once.
In Daggerfall, everything had a kind of cookie-cutter approach to it. All of the towns in a particular area looked pretty much the same, all of the NPCs looked pretty much the same, the dungeons all pretty much looked the same, etc. Not so in Morrowind. As with Redguard, everything down to the fungus on the trees has been hand-crafted and hand placed. The NPCs still look pretty much the same, but their dialog scripts are usually different, giving each of them a somewhat different personality. You have 3D graphics (character and NPC movement are very similar to Redguard, except much better), weather (it works similarly to Daggerfall, except that it can change at any time, not just a midnight), moons, clouds, water effects, etc. If you're looking for eye candy, this is the place to be.