Actually, interesting you resurrected this thread...I've since played MUCH more Morrowind. I also picked up a (shhh) warez copy of NWN to see if I could get into it enough to fork over the cash.
So...I'll comment on your comments to my comment:
the game world is huge but very lifeless
That still seems a little true. There are touches, though. Once you get along some on the main quest, events start happening in the game world. Also, if you advance in the great houses you can build your own little town - a fortified compound. You can actually change the game world quite a bit. And, of course, NPCs do react to you - quite a bit once you start on the main quest, but even to a lesser extent depending on your level of criminal activity.
I was a little disappointed the first time I saw them milling around in the street at 3am at the same spot they were earlier
This is the only thing that really damages the immersion in it. The developers, apparently, experimented with having NPCs actually having legit daily activities (and you can even see part of that in one of the bosmer's activities in Seyda Neen). They decided against it because it just made the game so much harder. You ended up not only having to know WHO to talk to at a given moment, but then you had to FIND them using time sensitive information.
So, they decided, it was a LOT harder to write into the game, made the game harder, and didn't really add anything - so it was scrapped - for this game.
In NWN it isn't much different. This is not a game where the NPCs go on about their lives
I did notice that.
only that I got bored with MW and stopped playing, I finished NWN
Well, I've finished neither so far, but uninstalled NWN. I guess I liked the freedom Morrowind offers - that in NWN, once you leave an 'area' you can't always get back...was a little irritating. The game was just TOO linear. It's like, it acts like a roleplaying game (in which you could play any role and play the game as you will)...but it isn't really - there is only ONE way through the game.