Essential
* Official Patches
* Unofficial Patches - base game, SI, any DLCs
* Oblivion Mod Manager (OBMM) - these two things or BOSS, for organizing / load-order setting
* Oblivion Script Extender (OBSE) - required for many mods' scripting
* StutterRemover - used to have the game stutter for some milliseconds every three or four seconds or so.
* Oblivion Optimizer - another performance fix that does something to meshes. This is probably the right name for it
Baseline Gameplay
* Oscuro's Oblivion Overhaul or something similar. Includes many additional mods besides altering the autolevelling of game areas and other basic balance fixes, like showing a visual change to plants and containers after you harvest or loot them.
* AllPlusFiveAttributeModifiers - no longer have to micromanage skillgains to make sure you don't level up before guaranteeing +5 attribute modifiers. By level 5 I was short 21 attribute points simply because of the number of times I used Detect Life, Night Eye, Feather, or Stealth in various combinations while exploring caves. The second time I got two +2 level gains I installed this thing and fixed my attributes via console. The game simply shouldn't have been designed with that ridiculous leveling scheme.
* QuestAwardLeveler - makes sure you don't screw yourself out of good quest rewards by doing the quest at a low level; the crappy low level versions of quest rewards will now gain levels with you
* PiiiP - Enhanced Grabbing - supposedly makes Grabbing work better, but more importantly doesn't count moving stuff around as theft
* Enchantment Restore Over Time - reduces the obscene expense of keeping enchanted weapons charged. 10 points per 10 seconds might be too high, but it can be adjusted. Long or constant fighting can still completely deplete an enchantment, I'd imagine, especially if you design a powerful enchant with a low base charge
* 100PercentHarvestChance - supposed to no longer let you fail to gather, but might be sensitive to load order (still getting less than 50% success)
* 300ft crime detection - the guards are no longer omniscient; you or your escaping victim must be within 300' of one to acquire bounties
* Realistic Physics and Force Package - fixes ragdoll floppiness a bit, or makes the game less funny
Interface
* Darnified UI - if you modify the default, the settings have to be manually entered into an XML file. In game, set up the elements where you want them via the last journal tab, and note the X/Y values. Then set the X/Y positions and true/false flags in the hud XML file to match what you liked in game.
* Expanded Hotkeys and Spell Delete - adds modified hotkeys (shift+number, etc) and exposes the hotkey wheel thing when setting those hotkeys so you can see what has been set
* Keychain - all your dozens of keys put into this internal UI container
* ToggleQuantityPrompt - hold down shift to autobuy/loot/sell an entire stack
* Decorator Assistant - fine-tuned object placement via a bought spell
Gameplay Expansions
* Alchemy Advanced - overhauls Alchemy a little and gives a better interface for it as well
* LessAnnoyingMagicExperience - a re-balance of the magic system (similar to the alterations of the leveling experience by OOO) and adds some magic spells at start.
* Stealth Overhaul - makes cloak and dagger a bit more cloak and daggery
* All In One Basement - puts a basement hatch into the (original) houses you can buy. All your houses are connected to this one basement, and you can use it as your collection warehouse. There are two bits of cheating that this addon allows though -- there's an alchemy room that has built-in enchanting/spellcrafting lecterns (though they still cost gold and soulshards to use), and it also has one of every ingredient growing in it. Also, you can essentially use the basement to warp between owned houses without losing travel time. On the upside, in the alchemy room are a couple hundred jars that will automatically sort all your reagents and tools for storage and usage, and some extra pots you can store uncategorized ingredients in. I keep rare books in the trophy room and all my special armors/weapons in the bedroom.
* BHC Expanded - adds more Black Horse Courier newspapers, and makes it easier to get all the stories.
* Open Cities Classic + OOO Compatibility Patch - including Leyawiin Reborn - All cities except the Imperial City and Kvatch are now part of the world map. These mods have to be loaded last-ish otherwise Oblivion will CTD while starting. Leyawiin Reborn turns the port city into something special -- it straddles the river now with the fortified castle on an island between the two halves. I'm pretty sure that's the right name for the mod.
Graphics
* Better grass texture without tiling
* Improved Water For Oblivion And SI
* Landscape LOD Texture Replacement
* Landscape LOD Texture Replacement Border regions
* QarlTP3 + patch
* Real Lights - underground areas are a much darker place, lit only by actual light sources present. You will actually need torches/light staffs, night vision spells, or your light spells.
* Visually Realistic Lava