Stealing Guide
Who says crime never pays off? There's plenty of coin to be made from ripping off the population of Morrowind. The key is not to get caught.
You can steal anything from anyone, but if someone sees you doing it, you can be arrested, or a bounty will be put on your head. NPCs who see you steal may also attack you.
You can steal without being caught as long as you're outside of an NPC's line of sight — behind walls, pillars, in other rooms or empty rooms. You can also steal more easily if you have a high Sneak skill and are sneaking around. The Chameleon magic effect also helps (but Invisible won't, so don't mix them up!).
Bounty
If there's a price on your head, you've got a couple of options. The first is to pay the price for your crimes, which means handing over a fine and any stolen items in your posession over to a guard. If you're low on cash, or you're unwilling to pay, you can be forced into working of your debt — which lowers your skill. You can also resist arrest.
If you plan to pay up, a handy trick is to drop any stolen items you're carrying on the ground, or in a nearby container. After paying your fine, return to pick up your stolen items. Guards are unlikely to notice this.
If you join the Theives' Guild, however, you have a much more attractive option. There are a few guild members who will help you clear your name for a lower price than the fine. But the trick here is that they'll consider the payment made even if you don't have enough gold. So, drop all your money into a crate (or on the floor) before speaking with the guild member. The dialog box will say that X gold was taken from your inventory, even when you had none. As NPCs of Morrowind, who are known their towering intellect, the guild members are quite comfortable with this transaction. When you're done, pick up all your money and be back on your way — the bounty on your head is gone!
