First, I recommend that you read the pinned post:
http://mwsource.com/forum/index.php?showtopic=1301For quadratic lighting, I recommend setting the radius to 3 (not 1.5) and reducing the quadratic value from 16 to 12--This spreads out the lighting a bit and keeps torches from creating large white patches: the other settings made torches a bit useless (they only light up your face) and too bright at their epicenter.
DO NOT set windows to the "conservative swap file use" setting if you run into that. This could cause problems with your swap file (it did for me).
Also, instead of turning the sound off, try using hardware sound and downloading the most recent sound card drivers. This suprisingly speeded up my game.
Set all the shadows to "zero". Half the time they're barely visible, A third of the time you can see shadows through the floor and walls (a weird bug), so they're not worth the HUGE hit they do to your processor.
You might also want to read my general windows tweaking guide:
http://mwsource.com/forum/index.php?showtopic=5905This will not only speed up morrowind, but any other games you have and windows in general.
If you have a spare $100 laying around, you might want to invest in a new video card. Builtin ones have a notoriety of being buggy and slow. If you have a 100 more dollars, swap out your celeron with a P4 of the same clock speed. Having taken numerous computer architecture courses, I can tell you right now that a P4 is much much faster than any celeron.