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I can confirm this. I installed MGE (tried both versions - 3.8 and latest SVN snapshot), installed both C++ redistributables as well as Direct X 9.
The gui will run, of course, and all .ini file based features of the GUI work, but the actual in-game-modifications are missing - there's no error message or crash either, it's simply as if MGE is not installed.
The mwse-mge.log file says...
2009-06-25 20:08:28 UTC in Morrowind Graphics Extender (MGE)
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warp committed patchset 23 of module pmc to the Perl Mud Client CVS repository, changing 2 files.
2004-05-01 00:01:56 UTC in Perl Mud Client
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warp committed patchset 102 of module psh2 to the Perl Shell CVS repository, changing 1 files.
2004-04-10 12:18:07 UTC in Perl Shell
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warp committed revision 605 to the Perl Shell SVN repository, changing 1 files.
2004-04-10 12:18:07 UTC in Perl Shell
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warp committed patchset 22 of module pmc to the Perl Mud Client CVS repository, changing 1 files.
2004-02-23 08:41:38 UTC in Perl Mud Client
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warp committed patchset 21 of module pmc to the Perl Mud Client CVS repository, changing 3 files.
2004-02-23 07:25:29 UTC in Perl Mud Client
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warp committed revision 604 to the Perl Shell SVN repository, changing 3 files.
2004-01-30 12:33:54 UTC in Perl Shell
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warp committed patchset 101 of module psh2 to the Perl Shell CVS repository, changing 3 files.
2004-01-30 12:33:53 UTC in Perl Shell
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warp committed patchset 100 of module psh2 to the Perl Shell CVS repository, changing 2 files.
2004-01-29 17:49:34 UTC in Perl Shell
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warp committed revision 603 to the Perl Shell SVN repository, changing 2 files.
2004-01-29 17:49:34 UTC in Perl Shell
