Morph Texture Removal - Cleaner and better skin details  

This Gets rid of the textures within the head morphing file which would otherwise interfere with the existing head normalmap causing distortion and poor quality.

I'm confused. What does this do?

The simple explaination:
There is a file in the game that is used to change the shape of your head depending on what you selected in the character creator. This has some built in textures it lays on top if you any of the non-default shapes. These are of rather poor quality, and have been disabled.

The longer explaination, for modders and other interested people.
The body morphtarget files have one baked-in normalmap for each shape it can change to, so a total of 80 textures. These are 512x res and rather bad overall.
They usually cause a very pixelated appearance. They are however not used when every shape is set to the defaults, aka variant 1.
These 80 images have now been turned into a single image, which has been made into a flat normalmap, and then "voided" by making the alpha channel black so it has no effect whatsoever, since this is used as an overlay texture. Therefor it does nothing.
This means that the "usual" normalmaps modders etc are used to editing will be solely responsible for the details on the face, instead of being overridden and distorted in certain areas.
To make the long story short again, this clears out any effect the morphtarget had on textures, so "what you see is what you get" when editing the face textures and normalmaps.
Now only the base normalmap, wrinkle/squash normals, and the microdetail normals have any influence. You have full control over these and can just edit them in dds/xbm format.

Potential Conflicts

Anything that gives V a custom head or otherwise edits the head morphtarget file. This is not done commonly aside from custom heads for character swaps, so little to be concerned about.