I've also recently returned here, and was overwhelmed by the number of mods.
For the real realism experience the RuB (real u-boat) mod is recommended, but I admit that is a tad too realistic for me (read: too difficult).
The mod I've installed now is the Grey Wolves mod. It's excellent, and includes Rubini's wonderful tinkering with AI traffic, along with lots of other enhancments, including many visual/graphical improvements.
You'll find it it the stickied thread in the SH3 mods forum. Recommended!
Here is the link to the GW thread:
http://www.subsim.com/radioroom/showthread.php?t=90874
2nd edit: Do not be intimidated by the rather extensive instructions, but note the 'do not make changes to the sub before your first patrol' and 'do not upgrade the sub immediately when returning to base, but wait until you're about to leave for your next patrol'-parts, and you should be ok...