Here are the main three you will need:
http://planetelderscrolls.gamespy.com/View.php?view=OblivionMods.Detail&id=1417
http://planetelderscrolls.gamespy.com/View.php?view=OblivionMods.Detail&id=2754
http://planetelderscrolls.gamespy.com/View.php?view=OblivionMods.Detail&id=2384
I use http://planetelderscrolls.gamespy.com/View.php?view=OblivionMods.Detail&id=2764 by, of course, DarN. it goes a long way toward making Oblivion's consolized interface useable. Configurable from within the game via a menu. I modify it with one of Luchaire's re-colorings, either http://www.tesnexus.com/downloads/file.php?id=16387 or http://www.tesnexus.com/downloads/file.php?id=16897 I also use http://www.tesnexus.com/downloads/file.php?id=14822 by WillieSea and http://www.tesnexus.com/downloads/file.php?id=19063 by Badmagic to enliven the map with color and to replace what I consider to be ugly map markers with more aesthetically pleasing X's.
http://planetelderscrolls.gamespy.com/View.php?view=OblivionMods.Detail&id=3953 by Oscuro, dev_akm, MadCat221. Not just a "level scaling" fix, or a creature-adding mod, not just a 'difficulty' mod, not just a 'gameplay-tweaking' mod either, Oscuro's Oblivion Overhaul is actually one of the finest finest
roleplaying mods around. http://planetelderscrolls.gamespy.com/View.php?view=OblivionMods.Detail&id=1757 by Martigen, Corepc Dev_Akm Shadowborn is the perfect complement to Oscuro, adding much-needed spontaneity to Oscuro's static world. Crank Martigen's mod all the way up and Oblivion will feel as wonderfully unpredictable as an MMO. These mods are so inseparable to me I count them as one.
I'd also recommend http://www.tesnexus.com/downloads/file.php?id=14065 by tejon, or http://www.tesnexus.com/downloads/file.php?id=13879 bu ABO. Two excellent character-levelling mods that do away with stat management, allowing the player to concentrate on roleplaying. And http://www.tesnexus.com/downloads/file.php?id=14304 by tejon, which allows the player to control the speed of advancement of each skill. Easily configurable via an .ini.
http://www.gamesas.com/bgsforums/index.php?showtopic=984109 by XMarksTheSpot, Brumbek & Ismelda. Adds window lights that turn off and on in synch with day/night cycles and smoke from chimneys. Comes with a nice variety of window color tints.
http://morrowind4kids.com/pseronwyrd/PW_MorrowindFog.zip by Pseron Wyrd. Near-infinite view distance in Oblivion is butt-ugly and makes Cyrodiil feel much smaller than it ought to, in my opinion. This is my attempt to simulate Morrowind's fog. Also tweaks RBG values for fog and weather to feel warmer.
http://www.tesnexus.com/downloads/file.php?id=2536 by Max Tael. One of the plugins in Max Tael's Natural Environments suite of mods. Adds several non-hostile flying animals such as birds and butterflies.
http://www.tesnexus.com/downloads/file.php?id=16513 by Bananasplit, Wolfslady, Reckless, SilentResident, Nernie, Vorians and Ismelda. The way the cities of Tamriel should have looked. Spend hours wandering around like a tourist, awestruck at how different (and gorgeous) everything looks. Comes in modular form - you can choose to redo all of Cyrodiil's cities or just one. It's your choice. When I'm not using Better Cities I use Arthmoor's http://www.gamesas.com/bgsforums/index.php?showtopic=1019807, which tranfers the vanilla cities into the Cyrodiil worldspace, ala Morrowind. Wonderful for those of us who love to ride horses through town.