I think that this is self-explanatory. All files from the instructions have been extracted to appropriate locations, but the installer is asking for Skywind.esm, which is encoded into Skywind.cmf. Does the installer simply not work?

I think that this is self-explanatory. All files from the instructions have been extracted to appropriate locations, but the installer is asking for Skywind.esm, which is encoded into Skywind.cmf. Does the installer simply not work?

It's always worked for me. Try running it as administrator. And you should update your Morrowind.