"Buggy" is the term often used but it implies something quite horrible. Since the software is on DVD-ROM the only fix would be to replace the disk with one that contains revised software.

More likely the cause of Xbox crashes is due to memory errors or more specifically running out of available RAM. Morrowind is port of software written for the PC. Bethseda recommends a minimum of 128MB RAM on the PC. The Xbox has 64MB RAM which means they kind of had to shoehorn it in.

This is entirely speculation on my part but I suspect that every sector of Vvardenfel is on the DVD in generic form. The engine loads the generic copy and then makes changes based on information contained in the save file and/or disk cache. This is why a sword can be dropped on six-toes floor and still be there a week later. The sword is not on the floor in the generic Balmora on the DVD but is added to our Balmora after the sector has loaded.

Sadly, when too many changes are made to the world the machine runs out of RAM and crashes.

There are some memory conservation recommendations elsewhere on this site under "dirty disk error" or something like that. If the recommendations are followed most of the so called "bugs" will disappear completely. This proves that they were never truly bugs at all.

Of course there may be actual bugs as well and it would be useful to hear from those who suffer from them.

Happy adventuring.