Well, we've already updated your video driver, so the only other thing I can think of that would cause crashes is your CODECs. You have Intervideo CODECs, and some versions of those cause problems for Morrowind. Intervideo is probably WinDVD, which is your DVD player. If you have the CD to reinstall it, try uninstalling that and see if the problem clears up. Or try my CODEC Reset Utility - see the link in my sig.
Failing that, please post an updated dxdiag report.