Which doesn't always mean "better". Oblivion's leveling system was the same as Morrowind's for example, but totally messed up in comparison. Basically, you either had to micromanage every level, up to level 50 which killed all the immersion attempts, or you had to play on low difficulty cause casual players would get overrun by a wolf once they would reach a decently high level, because they didn't get all 3x5/2x5+luck bonuses to attributes. Having to shoot a wolf 20 times with an arow is
not fun. Also the fact that once you've leveled above certain treshold every [censored] hill billy wears a full arsenal of daedric equipment, be it a count, or a poor bandit in the wildlerness that makes money by shaking down 20 gold pieces from a traveler fearing for his life in the process killed all the immersion that might have left after micromanaging. I'm not even going to get into being punished for doing a quest too early in level by getting an armor that was supposed to have an armor rating of say 100, but you didn't do it before reaching levrl 40 so you're stuck with a piece of crap with an armor rating of 30, or having a blade that does 10 damage but after grinding a bit magically increases to 50.
Not to get the wrong idea, I'm not hating on the game. I've spent quite some time with good 4-5 characters over level 70-100+, it's just how I feel about
this part of the game.
(well ok, I'm lying, I also found it lame that each character can join every single guild in a single playthrough, MQ story was totally lame and uncreative, as well as unrewarding, I mean we do all the hard work, Martin basically just reads comics in his hidden castle, but he does all the speeches and rarely, if at all, credits us for killing half of oblivion plane, lack of at least a voice actor per race, instead we got stuck with one guy doing ALL elves, one guy doing nords, orcs, argonians and khajiits [which I wouldn't mind if it wouldn't be so painfully obvious that it's the same guy] and so on. I was also more irritated than not by graphics that made Cyrodiil looking like legoland for me, and I was expecting to see 7 dwarves, snow white and a unicorn [which eventually lead to a 2 minute facepalm after I actually found one]).
I loved the combat system, and I really really loved some of the awesomely written quests (one of the example of a quest that I loved teh concept of was the quest of infiltration into the blackwood company, where you had to drink a potion to fortify your "combat skills" and wipe out a village of goblins). Out of those two however, Oblivion has nothing on Skyrim combat-wise.
This is, of course, all just an opinion so I hope no one will get his ears up in madness.

You guys are going to scare him off!
People make the Oblivion leveling system sound much more intimidating and complicated than it has to be.
Here's what I find works:
Of the 7 majors you choose for your custom class:
Pick 3 that you intend to use all the time (making sure each is associated with a different attribute).
Pick 4 that you intend to never use, or not until much later in your character's life.
If you intend to melee a lot, make sure to wear heavy armor and repair your own armor plus enemies' armor whenever you get a chance, and block a lot. Though those are things a melee'r is likely to do anyway. But the point is, those three things (heavy armor, armorer, block) are associated with the endurance attribute, which directly influences the growth of your health points.
Really, that's it. I currently have a level 15 custom class (Silver Knight) in Oblivion. My character has focused on using 3 majors (blade, heavy armor, restoration) and a wide variety of minors. The other 4 majors have yet to be used. In this way I have leveled in in a slow steady way, always had nice big bonuses for my strength and endurance at level-up time (and decent bonuses to put in speed), and I've not once sat down to make a spreadsheet or track things on paper. And at level 15 strength and endurance are maxed at 100 and speed is over 80. It's not difficult.
What's nice about Oblivion is how much control you can have, if you choose to, but you do not have to micro-manage as you play. A build with some majors-as-minors allows you to just play and still do quite awesome just by playing.