I believe I may have run into a minor dialogue gltich today, particularly with the "Served Cold" quest. In the Ulen Ancestral Tombs, the NPC that you are spying on claims that they would not expect this from someone who is not a Dunmer. Thing is, I am a Dark Elf. At first I assumed maybe it went with the "Outlander" thing that Morrowind was known for, but then I remembered that there was a more major problem with vampires with the Dark Brotherhood where the awaiting chef would not continue on because she could not determine your race. Perhaps this is the samething.
Not a big deal, but it was a little immersion breaking for me.