Axolotl said:
It's bad. Real bad.
Try Morrowind, better game and with graphics mods looks better.
To be more specific, it's horrendously buggy and mods only make that worse (and without mods it's really bad) AI is monumentally bad, voice acting is truly awful and everyone has the same 10 voice actors. Leveling system is broken, enviromets are balnd and empty, the dungeons were created using a random level generator and they look it. Psychic guards, boring quest design unbalanced skill system. The main plot is as trite as they come and you aren't even the main character.
I'm sorry my friend, but you are full of shit.
Coming from somebody who has played both Morrowind and Oblivion to almost 100% completion (and starting with Morrowind, I might add) I'll tell you that both games are fantastic in their own way.
Morrowind on one hand, is the more "complex" I guess you could say of the two games. It is notoriously difficult to get into - the amount of information you're expected to comprehend at the beginning of the game is enourmous - but once that learning hurdle is done with, it's a very deep and exiting game. To me, Morrowind's main focus was a loot one - you'll soon fall into a routine where the game is most exciting when searching for the best loot you can find, which is out there to discover from the very beginning of the game. The main plot of Morrowind is brief, boring, tedious, and essentially just another side quest, and I find Morrowind to be more of a sandbox game than Oblivion due to its lesser focus and greater diversity in environments.
Oblivion on the other hand has its fair share of problems too. Levelling exists in both games but is much more apparent in Oblivion - if you decide to use a character with an unusual selection of skills you may find it very difficult to survive as you continue to level up. Loot is for the most part also levelled (although there are several notable exceptions) so you normally can't just go out and find amazing gear from the beginning. The pros of Oblivion though is that it is much more story based - not just focusing on the main quest, but also on the side quests. Questing is much more developed, and is rarely the "go here, find this, bring it back to me" idea that is so prelevant in Morrowind. Most side quests are much more personally involving and interesting and fun really, despite the lack of different environments and iconic buildings like the Vivec Cantons in Morrowind.
Oh, and there's also the combat problem. Morrowind's combat is not terrible per se, but Oblivion's is miles above it, you'll see what I mean if you try them both.
My reccomendation to you is that Oblivion is definitely worth buying, and so is Morrowind. Whichever game you enjoy the most is really up to your playing style, after playing both games I can't even comprehend the stubborn attacks given by some of the haters up there which for the most part have little grounding. Just a warning though, if you buy either game be prepared to lose about 150 hours of your life on each.
EDIT: to the OP, one final note of advice is to ignore the suggestions that Oblivion was "dumbed down for the consoles". Morrowind was released on Xbox for one, and for two, anyone I seriously talk to about the issue seems to have an argument in line with "baww they made axe and blunt into one skill the game is ruined bawww." Play the games for yourself, comments about dumbing down are simply bitter expressions of Oblivion not being a nostalgic revisit to Morrowind's system, which for one I think is a positive thing. Progress.