What changes have they made from the oblivion system and do you like the way the new system works?

Your skills won't decrease, only your skill progression.
I think it's better than earlier games. But I miss how Daggerfall did it, with a court and all.

Honestly, Prison isn't nearly as intimidating as it should be. You killed this person, you can buy amnesty from your crimes with money, or you can rot in jail for a day or two. I think crime needs to be taken very seriously. For example, unless you're in a city that the TG has influence in, you can't pay off murders. Once you serve a sentence, you should be exiled from that city for a certain amount of time. I.E. Thievery = 1 Dat. Animal Slaughter = 3 Days. Murder = 10 Days. Multiple Murders = 1 month.

If you are going to commit a crime, make sure that skill you have been nursing along is not ready to go to the next level. Get it to that level, then commit the crime.

Just be careful if you get the Bribery Perk, I paid a guard 400 Gold to ignore a crime that has a bounty of 1. And, I still had to pay the Bounty!

Care to explain this a bit more, just I never played daggerfall before, thanks.

There are secret exits and things in your cells now. It's a major improvement from Oblivion.

This will of course not fit well with Skyrim, but...

Say you comitted a crime and got caught. You surrender to the guards and are sent to court. There you could either admit your guilt or try to talk you out of it.
If you try to talk and get found guilty, your punishment will be longer. If you do talk yourself out of it you are free to go.
I think the talking is based on Personality.

Totally agree, I didn't like Oblivions prison system.

I don't think I've ever seen a hidden path before

Oh, yeah. Forgot those. Love 'em.