So I just fast traveled from Seyda Neen to Balmora. My magicka was down about half and my health was down about 1/3, yet when I got to Balmora both were full.

I can't believe I never noticed this before..... but I never noticed this before.

Is this the way it's supposed to be or did one of my mods add this?? If it was added by a mod I guess I'd rather undo it. If not, it seems a way around resting forever (except to level up). I was resting sometimes just to refill them (especially magicka since no restore magicka potions are available in early game) but if fast travel does it, then no need for that anymore.

I'd rather not uninstall the game yet again and install vanilla Morrowind just to find out this answer so I hope someone here knows.

From [url=http://www.uesp.net/wiki/Morrowind:Transport]http://www.uesp.net/wiki/Morrowind:Transport[/url] So yes, it is intended. I would expect that, if you have the Atronach birthsign, that you won't get the magicka revovery when you fast travel.

(Incidentally, in Daggerfall I believe fast travelling cautiously will also refill your health, stamina, and (assuming non-Sorcerer) spell points.)

Makes sense from a roleplaying perspective, doesn't it? If you don't travel on your own but use the public transportation system, you can rest (in Tamriel you can even rest safely while in other games you can get robbed or have other unpleasant encounters while fast-travelling) and regenerate just like when you are resting in a bed (except that you can't level up while fast-travelling).
In Daggerfall, you can fast-travel cautiously or recklessly. "Cautiously" means using public transportation and arrive at full strength, while "recklessly" gets you to your destination quicker, but not rested. As many quests require travelling and have a time limit, it's often a tough question what method to use.
In Morrowind there are no time limits, so it's more a question of convenience or interest (or lack of interest) in exploring the countryside whether or not to fast-travel.

OH THANK YOU. I wish I had marked this as a question so I could mark your answer as the solution and get you 5 rep points (or however many it is). I'm so sorry. I'll plus one it though.

I have another question so I'll be sure and mark it as a question this time.