No such thing as too many though their state of disorganization is indeed irritating. I wonder if a subforum would make it better. I kind of doubt it.
Essentially, mods can be broken down into two types.
1. Texture swaps. These uses uMod and replaces some of the textures. Most of these are early mods but some of them hold up very well. I really like the wet shirt stuff for instance.
2. DLC mods. These have costumes/models packed into a DLC package and we alter the .ini file to read said package as if it was a real official DLC. You may need a 3rd party launcher/cracked launcher.
As for which mods you use, it really depends on you. We have some pretty awesome stuff with Harry's real nudes being at the forefront in terms of quality though we also have another set which gives us higher res and some nice looking bikinis on the side. Then we have those lovely lactose mods
Variety is awesome. In fact I'd say the devs have been keeping an eye on the scene and even took a few pointers for DOAX3 as now the girls's clothes will begin to slip ala wardrobe malfunction.
Edit. For what its worth. I'm pretty sure I saw a "all in one" package for simple quality nude skins from Harry in a topic somewhere back in GVZ. No idea if it made the conversion over here to undertow but I assume it did. Happy hunting.