Just something that took me a little while to figure out ... so I decided to share it here.
Till now I've avoided specular maps because they always turn out too shiny and uniform ... well it seems that the problem was with the Material's glossiness:
For proper Specular Hilights the material's glossiness needs to be high (for most morrowind meshes its lower than 0 ... which causes the problem stated above ... too shiny and uniform).
No Specular Mapping (no dynamic hilights)
Specular Mapping ( Glossiness = 0 )
Specular Mapping ( Glossiness = 30 )