Pretty much the only thing that is preventing me from trying this out is the lack of compatibility with other mods. I play with a lot of them, so it is an issue. But then as I think about it...and look at the list of supported mods ... I have a couple of questions that did not stand out in the readme.
I assume that kills and small checks like lockpicking will still work with mod added content - but is there any other concerns?
I assume that one thing that would be desired is XP from completing quests, but then you don't get that from Oblivion either, so what does the compatibility for something like Kragenir do?
Sorry if I'm way out of touch with this - I've not followed closely.
Did you read the opening post? I give a brief summary of what this does in the Description section there. It's basically the same idea as the Dungeons & Dragons style games. You gain new levels by earning experience points. When you gain a level, you have an allotted number of points to spend on improving your attributes and skills. Just like in a D&D game, you get experience points for completing quests and killing things. With Oblivion XP, you also gain experience points by doing other little things like lockpicking, discovering new locations, reading books and making potions.
Oblivion XP has support built in for all the quests in the base game as well as support for 25 mods. Mods like Kragenir's and Enhanced Economy are unique because the mod author (Povuholo and TheNiceOne) built Oblivion XP support into their mods. So when you do the quests in those mods, you get experience points. This is the ideal situation because you don't need an extra patch to get experience points. Also if the author changes something, those changes will be available as soon as the new version is released. For the built-in mod support, Oblivion XP does that processing whether you have the mod loaded or not. While that doesn't actually cause much of an overhead, it is extra processing. Also if the mods change, a new version of Oblivion XP has to be released.
Considering that there are hundreds if not thousands of players using this, I believe that it has a rather large mod compatibility. The only issues that I have heard of is that kills from the special combat moves in Unnecessary Violence aren't recorded. HeX_Off has told me that that has been fixed for UV 2. Also kills caused by some of the Midas Magic spells are not recorded because they don't update the kill statistic. This only includes spells like Holy Fire, Holy Burst and Holy Orbs. Lastly you can't use Oblivion XP with other levelling mods, nor can you use Face Exchange Lite because it resets all the player statistics. You can however use Wrye's face import feature.
I will expand on the second post in this thread a bit about 3rd party mod support.