I am split on my choice.
Gameplay:
Oblivion
Amazing Collsion detection, Easy to use controls, and awesome voice sinking/facial expressions, easy to read text, and pinpoint mapping systems make it easy to know where you need to go when you are in a hurry, and the fast travek function kicks ass.
Storyline:
Morrowind
multiple quest story lines, and a great storyline for the main story.
Character design:
Oblivion
Thousands of facial expressions hundreds of hair styles/colors, Eye color choosing system
Over all I lean more towards Oblivion but then I am still a fan of Morrowind.