Ok, this is an old thread I know. However, I just have gotten myself a new Morrowind 'hobby'. After all, after going through all the quests a couple of time you need to roleplay in order to keep yourself entertained.
With my latest character, I collect every robe I see. I then keep them around in my inventory for special occasions. Normally, I use a common brown robe to look like your average pilgrim. For Mage bussiness he wears a common blue robe. When talking to nobles he wears an expensive green robe. Finally, when my character has to fight, he switches to the blue extravagant robe with that big spider hugging the chest. (my favoruite robe) It adds to the looking good factor when he's frying everything in sight with big shock spells.
I even go so far as pretending that each robe is a separate identity. Too bad none of the NPCs want to play along with that though.