0. Set Windows to show file extension and hidden files
http://kb.winzip.com/kb/entry/26/

1. find your Morrowind Saves folder http://steamcommunity.com/app/22320/discussions/0/846960628302725599/

2. get and copy tes3cmd.exe to the Saves folder
https://code.google.com/p/mlox/downloads/list

3. copy
mark_read_books.bat
mark_read_books.pl
to the Saves folder

4. if you have any save with name starting with "books", delete or rename them

5. start Morrowind, load your best save, make a new save called "books", exit game

6. you should have a new file named books0000.ess. To upgrade it, run (double click) mark_read_books.bat

your "books" save (file name books0000.ess) should now be upgraded so read skill books have a * prefix allowing to more easily recognize them