I prefer FO3 to Oblivion. But that's possibly due to the mods that up the survivalist nature of the game. FO quests are much more variable in their completion, and karma (whilst still not perfect) works better than 'STOP RIGHT THERE CRIMINAL SCUM!' when you *look* at something that isn't yours.
Frankly, Oblivion barely registers as an RPG to me. It's like Eye of the Beholder claiming to be an RPG - it's a dungeon hack on (admittedly) a huge scale. It merely gives the illusion of freedom/sandbox.
Personally, the only way I'd be willing to consider Oblivion above Fallout 3 would be if the combat mechanics were the same as Mount & Blade. Truly, the combat for Oblivion is awful. And if the number of combatants could compare to M&B in the important battles. Seriously .. the Battle for Kvatch? Me + 5 guards, 4 of whom are butchered by midget imps. IMPS?! Leaving me, AGAIN, to single handedly cut a swathe through hell. And that laughable 'final' battle in the snow? Jeesh ...
Goddamn, Oblivion with M&B combat (directional blocking, head shots, MOUNTED COMBAT *squeal*) and M&B battle sizes (it doesn't have to be Helm's Deep, but c'mon, 12 in the battle to save the kingdom?!?); now that wouldn't just be GOTY. It'd be Game Of The Frickin' Decade.