Guns would be pretty pointless. First, they'd have to be flintlock style or similar to fit into the rest of the tech. What that would mean is FIRE... okay, powder through a funnel, wadding, pack, bullet, pack, fuse... In the heat of battle? I think not. England lost their "gentleman's" type of warfare, and the States, precisely because of this. And precisely because of this, guerrilla type warfare, ambushes, just about any other means of fighting will always win over slow-load, single-shot fire arms. So... okay, sort of, but pretty pointless. Now, if the Dwemer happened to completely fall out of Nirn/Mundus, if they were transported to not just another universe, but another plane/brane, they could easily have advanced to a Steampunk-style world. IMO, Steampunk is sorely lacking representation in CRPGs and CGs in general. The last good Steampunk RPG I can remember was Thunderscape. I would LOVE to see TES span planes/branes to a new world, Steampunk style, completely apart from the existing TES lore. Skyrim's engine would be quite excellent for this, I think.
The things I think could balance out guns if they were implemented (which I'm largely indifferent about, partially because I like the look of old flintlock guns) are:
Benefits:
1. More powerful than arrows or crossbow bolts
2. Guaranteed stagger at far away targets/knock down on enemies at close range
3. Slight fear effect on enemies not hit but close to you when fired (manifests as an area of effect stagger)
4. Ignore 75-100% of armor
Drawbacks:
1. Less accuracy at long range (intended more as a mid range weapon really)
2. Can't fire in the rain (if we actually had weather effects)
3. Utterly useless for stealth past the initial shot
4. Long reloading time
Like I said, not a big fan of guns one way or the other, but I don't hate them as much as other people seem to. I'd also be okay with Akaviri Hand-Cannons being introduced, perhaps as the Blades' answer to hitting dragons who refuse to land/hurting them enough to force them to land?