In my experience it's the only graphics mod you'll need, since it bundles most of the other mods along with it, and can be tweaked depending on your system. It's got a lot of wonderful general texture mods, new vegetation and foliage, new hi-res textures on people/armour/weapons, the works, and includes the Morrowind Graphics Extender as well as a really cool automated installer that will fill everything in for you at light speed, and carry out all the tweaks pretty effectively. I really recommend using the Morrowind Graphics and Sound Overhaul, found here/ here.
Can't say I have much experience with the Steam version of Morrowind, since I busted out my old CDs when I was running it.