Patches bugs in the Morrowind program, which cannot otherwise be fixed by editing scripts or data files. Cures many crash and save corruption problems.
This does not, and never will work with OpenMW. It's listed here as a reference. This is needed for vanilla Morrowind because it is closed source, therefore a patch is the only way to modify the engine. With OpenMW, the entire engine is free software and can be modified; no "patches" are needed.