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1. Create an item of Fortify Magicka 100pts for 1 second on use. This lasts long enough for you to cast one spell with the extra magicka. (Other Fortify Magicka effects will work, but this is probably the most useful Fortify Magicka effect I can come up with.)

2. While the spell is in effect, cast a spell that lowers your Magicka to below 100. This will put your Magicka into the negatives, though the game doesn't show that.

3. Use the item again. Notice that your Magicka is less than 100. (This step isn't actually necessary, but is here to illustrate what is going on.) Now wait for it to wear off.

4. Save your game and reload.

5. Use the item again. Notice that you now have 100 Magicka. In other words, the game didn't save negative Magicka, allowing you to gain a bit of reserve Magicka.

Note that I consider this to be only a minor exploit. A major exploit would be draining your Intelligence to 1 and fortifying your Magicka, which can give you huge amounts of Magicka that don't go away.
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dtgreene: Snipped
Just start a whole thread of exploits for this game; something like "Morrowind Exploits 101". Surely you have about 1000 by now.