I must say that I haven't found any way of using mods by adding stuff to the UDATA directory, but I have managed to figure out how to do it using the construction set.
i must apologize for being selfish, I figured this out about a month ago but have been too busy to post how to do it.
What you need:
PC Morrowind Construction Set
Xbox morrowind
An FTP link to your Xbox.
What you do:
1. In the pc ini file, under the section [Editor] near the bottom, create an entry [WhoCanMerge], and under that <pc username> = 1 (where < pc username> is your pc username - for xp users on multi user machines, the name you click on to log in). There may already be a [WhoCanMerge], but I couldn't remember if I put it there or if it was there already.
2. ftp the file "Morrowind.esm" to your pc. Make a backup of the one in the PC Morrowind folder, and copy the xbox one into the PC directory.
3. Copy any mods you wish to add into the PC data files directory, but also make a temp folder and copy any folders (such as Meshes, Textures etc) into the temp directory as well. This is so you can add them to the xbox version as well.
4. Open up the construction set, and load the mod you wish to add. Select "Set as active file", and then there should be a new button "Merge to master". (This is why we edited the ini, to enable this button). Select the file Morrowind.esm when it asks which master to merge to (remember if you've done this all correctly, this should be the xbox .esm). and then click ok (or open, it should be obvious).
When it has finshed, you can close it all (there is no need to save, as this is done automatically) and then copy the new Morrowind.esm into the temp folder that you made earlier, and then you can make an iso or simply ftp the contents of the temp folder to your xbox morrowind/data files/ directory.
That's it. Remember not all mods will work, but I have managed to get a few of them to. I would recommend simply making a house with the construction set, saving it as a mod, loading it and merging it with the xbox master file (the .esm) and playing with that to start with. Hopefully once the GOTY edition comes out, this will enable ALL mods to work, as many require the expansions. That would be great!
Important: Make sure you delete the morrowind.esm from the pc data files directory, and copy the pc .esm back, as the pc version doesn't like running on the xbox .esm.
Credits:
Thanks to an unnamed bethsidia developer who posted on a forum somewhere how to enable the "merge to master" button. Other than that, I figured this all out myself, so I'll thank myself!
Thanks mate!
Well, your welcome.
No really.... thanks.
Well, you're really welcome!
No but I really mean it.
Well, you're really really welcome!
No, but ......