EDIT2: I have to correct another misunderstanding of mine: The converter will *not* be shipped with the mod. The mod will be shipped as .bsa and .esm. The converter will be used to create it. And it will contain the original heightmap of Vvardenfell.
EDIT: Sadly to say I've found, that my post above didn't stress one essential fact enough, so worm82p085's answer is based on an error ;-/
But before I come to that, please let me introduce myself in short

I'm no modder (although I've built a little island with a castle, a harbour and so on and gave it to my woodelf once. To tell the truth I have to confess, that my initial interest in these MO-tools (there are people left who believe Morroblivion to be a mod) was to get this island plugged into the Oblivion world for there is no hope for me to ever get this done twice. For technichal reasons this simply didn't work. My interest in the subject has changed meanwhile.
These days I'm walking through the net, filtering worldwide postings on the subject, gathering those collected information, edit them and if I'm ready with this give them to the public of my home site worldofplayers.de. May be translate them into English, if some site is interested in it. In this sense I'm simply aimed at strict documentation of facts, discussion and standpoints.
The main reasons why I've settled down my posting here were: The Topic is hot, people have heard about, have seen screenies and want to know, I believe they have a right to know and this site is a great place to give Information to a wider public (have a glance at the hitcount and you know what I mean. ;-)
I'm not going to tell anyone here what to do or to think and I'm sure most of you here have better knowledge of Elder Scrolls and creating mods for MW and OB than I will gain in the rest of my life.
@ Filtering:
Yes, it's unbelievable how much trash is posted world wide in the forums on the topic. A huge amount of that is posted by people, who simply cannot get into their heads, that they *cannot claim a right to have a software hosted on a site not owned by themselves*.
It's been said here but this you really can't say often enough: It's on the part of the host whom he like to invite. And if one doesn't like to host this or that software he is perfectly right not to do so. So, Dark One is not in any duty even to explain, but as he is an honorable man and a nice guy he does and even more invites us to comment on that. This is acknowledged thankfully and I hope I'm not too far off topic here

So, please take all this stuff in mind and throw it in the basket. Now we have some first light in the dark.
But it's not the only type of trash. On the other side people talk such strange things that there is a passage or something like that in Bethesda's Eula and this makes in consequence the MO tools illegal because the tool does something - or at least *can* do something - that is forbidden by the EULA itself. Please give me the right of being a little polemic, I love it, I found folks here are very humorous and there is really no offense at all

So "Meine hochverehrten Damen und Herren, Mesdames et Messieurs, Ladies and Gentlemen: *Please* hold your breath a short while ( but not so long that you get your heads red please

and try, just try to imagine what would happen, if it were in fact possible, just possible, that by no *other* means than a certain passage in the one program's EULA of programmer B actually another program of programmer A could be turned into illegal stuff ... Just try ... "
This is a very general question and only in so far related to Bethesdas Problem with the lawyers of its licensor. What would happen if? To say it in short, I think you guess what I mean.
So take this other and related kind of trash as well and throw it into the next basket (the other one had been filled yet as you may remember)
Now you can see that there is a valuable discussion on a in my humble opinion fascinating and very complex matter, which for such a bare egg-head as mine turns into nothing else than a pure brain candy
There are more reasonable arguments under way.
E.g: There's a widespread opinion in the *scientific* community of the Informatics and Cybernetics, that a program in itself never can be "illegal" but only the things you do with it if ever. But this is nothing I want to discuss here, just quote them. We all know that politicians sometimes won't give too much for the word of a scientist, so we find examples, that there *are* illegal programs, but they are not illegal by themselves but by law

Another thing is standpoints.Often we find, that there are arguments for this and for that side, and the question is *not* who can legally claim to be right, but to say what one thinks about. Democratic politics are a well known (and in this sense much too often misunderstood) example

I'm looking for such standpoints as well.
One of them sounds a bit like this: The Bethesdas are our friends. They gave to us an immense amount of fun and joy with their games and construction sets and if anyone tries to do them any harm, he has to talk with us as well (and if you have a very close look you can see this twinkling steel on their side). There you stand up you proud American guys and praise solidarity! Well said. The Bethesdas can be glad to have such friends as I've met here! Be sure you have friends here as well

I think I will document this as any valid and worthy information I have and will found on the topic. So beware, you may be quoted

Well. On top of this post I mentioned some error that I have to correct and it's mine, as I haven't stressed one point enough. Here is the respective post, so you don't have to scroll up

QUOTE(worm82075)
You have no doubt translated what is now their policy but that was not the original intent. They have altered it to be in compliance (or so they hope) with Bethesda's policies. When the program was released it stated clearly in it's readme the the intention was to convert Morrowind assets, be they Bethesda or player made, to the Oblivion engine for personal use. Bethesda doesn't want this to be done on any level and to allow any part of this would undermine their own policy. When they were informed by others of a similar intention to recreate those assets, those individuals got permission to do so. Just goes to show that informing them of your intentions before you act is the best way to go about these things. It matters not what their intentions are now, anything bearing the Morroblivion name will be disallowed because of prior actions. If they want acceptance from the big dogs they will have to change the name.
As I first read this I thought wow! Take that for granted and we don't know any more where we are talking about. But as I told you I've linked this post to some of "them" and in a very long and very friendly answer (it was my first post there and I was kidding a little) was hinted (among others), that I have mentioned - but not stressed enough the fact that the site where the quoted FAQ can be found is *not* the developer's site of the MO tools but the modder's site of the "Morrowind 3rdEra433" *modding project*.
Havelock said that ...
QUOTE
Il confond très clairement le programme Morroblivion et le mod Morrowind 3e433. Morroblivion continue à convertir les modèles de Morrowind. Mais ça ne se retrouve pas dans le mod.
"Obviously he mixes up the Morroblivion *programme* and the Morrowind 3e433 *mod*. Morroblivion continues to convert Morrowind models. But they will not appear in the mod."
So here we are and not a centimeter ground has been gained. Sadly to say.
It may be of some additional interest, that he stated once more, that they are completely committed to national and international copyrights, but that *they* have no doubt, that the programs are legal at least under European legal terms and that they are convinced that they do nothing illegal using it and modding there gameplay in the here described form. They will do nothing that could hinder the distribution of the mod but of course it will be necessary to distribute the then actual version of the converter tools. What I can do is to give them a hint, that it would be a good idea to get rid of this "Morroblivion" and put the tools just into an neutral subdir like "utilities or something like that (possibly together with a then actual version of OBSE, which is needed and might be shipped with the packages as a whole; but this is something I and possibly no one by now can say.).
Last but not least I may add my personal opinion if this is of any interest that as there is no problem existing for Bethesda as long as they do nothing to support these tools it *seems* to be that the best action they can take is simply to do -- nothing;)
@ worm82075 : As far as I have understood, they never gave any support to a *specific* mod project ;-? And I'm not quite sure whether their claim to say which mod is legal distribution and which not isn't invalid in general but this only goes for the case in that assets of the game are distributed because no one has the right to distribute real parts and assets of the game, no matter whether they are converted or not.
Now if you were so kind and read up to this end I have to apologize for the very long post and thank you for your patience and interest.
Exit Lord of the Strings
Edit: changed "pride" to "proud" of course. Sorry everybody "Muahahaar" LotS