With all the PS3 stuff flying around and with people saying they had no issues with Oblivion and whatnot, i'm slightly confused as to why people are using Oblivion and Fallout as examples. I thought Creation was a completely new game engine and had nothing whatsoever to do with Gamebryo?

This isn't a rant nor a discussion about how Skyrim performs, it's just a general question, because after reading the Sawyer interview and other peoples comments, it comes across as it's the same engine only it's been updated.

I'm lost!

It's a new engine, but it feels like its set up the same as the Gamebryo one, plus Skyrim is the same kind of expansive open world game as Oblivion and Fallout, with a similar quest structure and dialog system. Won't really know until the CK comes out just how much has been left the same, but already a lot of the console commands are the same, as well as the variables used to keep track of NPC stats, the divisions between spells/perks/diseases, the way sleep/wait/fast travel works, etc... The list goes on.

Since this is just a quick reply to give you an answer. I hear many times on this forum, however never researched it myself, that Skyrim apparently uses a heavily modified Gamebryo engine.
It clearly wasn't a perfect upgrade and they merely wanted to customise it enough where they feel it warranted masking the name of the core engine which is still probably Gamebryo's.
Gamebryo seems to have a mixed reputation so this rebranding of the name was a fresh hope at getting away at the tarnished name it has now.

So the reason why many people make the comparision is simple. Similar team, similar engine. Why does it perform so badly? Many blame the cross-platform porting.
But it's perfectly possible to build a game across many platforms, the real issue is lack of testing and fixing of problems before public release.
They didn't optimise properly for each system, they just didn't have the time.
Their deadline to push out by 11.11.11 was too tight, and it showed in all of the games on all platforms having issues, Some worse than others.
They also should of built the engine making use of Directx 10 or 11, with how high end they wanted to make it for the PC, to make use of the many advantages that come with moving away from 9 (limitated by consoles). Which Can't use these as far as I'm aware they are limited to Directx 9~I think (xbox360) and openGL 2.4 (PS3).

Thanks guys/gals for taking the time out to explain all that. Like i said, it was starting to confuse me why people were basing their theories around how FO and Oblivion worked on systems, when i thought Creation and Gamebryo were 2 completely different engines.

It's gamebyro. Here's the low down. You take Oblivion...You modify it then you get Fallout 3. Then you REALLY modify it from there to the point that it start to look like something else... You get Skyrim Aka Creation engine Aka Gamebyro 5.0? It's a really heavily modded gamebyro engine. So much that it doesn't even look like it under the hood... so they named it something completely different.

I'll come back with a video so Todd Howard cn explain it to you.

EDIT: http://www.youtube.com/watch?v=2eokdHSzhAY

Watch from 3:00 - 4:00ish

Heavily modified gamebryo engine. Anyone who says otherwise is lying, trolling or doing PR.
In fact, Todd even said himself in an official article that it's a heavily modified gamebryo engine (and well, the same engine Bethesda has used before in general, since gamebryo is just a renderer), but in different words of course.

Bethesda decided to call it a new engine and slap a new name on it because the old one had such a horrible reputation (and a well earned, horrible reputation), and because... "apparently" a lot of changes were made.