Preparation
Before installing the mods, there are a few thing that needs to be setup


1 -
If you haven't already, sign up at the Nexus. (LINK)
It's free, and it takes 2 minutes.

2 - Downloading and install NexusModManager (NMM) (LINK) *Install descriptions are found at the Nexus page if needed.

3A - (This ONLY applies for 64bit OS) - Download 4GB Memory Patch. (LINK) *I don't if there is a way to increase application memory on a 32 OS. Google is my best advise. However, this patch is not necessary at all for using OBP ENB or the essential mods. BUT, if you want to install the complete setup for high end systems, this IS necessary for stability.
Unpack the file anywhere you like an run it. Select "Oblivion.exe", and click OK. If you get a "patch successfully applied" message, you are all done. If you get an error message, don't worry. This happens if the OS protects .exe files from being manipulated by other applications. Windows 7 is notorious for this. The workaround is fortunately very easy. Rename "Oblivion.exe" to e.g. "Oblivion.exe.back" and run the 4GB Memory Patch again. Now select and patch the "Oblivion.exe.back" file instead. After the "patch successfully applied" message has shown, close the patcher and rename the file back to "Oblivion.exe" - That's it. Windows "super" protection bypassed.
*If your firewall or Antivirus complains about the patching, just ignore them. The patch is 100% safe. All it does is changing a flag for memory usage.
3B - Now patch "OblivionLauncher.exe" the same way.

4 - Download and install "Unofficial DLC Mehrunes Razor patch" (LINK)
Download the latest version and run the .exe to update.

5 - Download and install "Unofficial Knights of Nine ESP Patch" (LINK)
Download the latest version and run the .exe to update.

6 - Download and install "Oblivion Script Extender" (OBSE). (LINK) If you are running Oblivion via Steam, you need to download both OBSE (obse_0021.zip), and the latest loader (obse_loader.zip). If you don't run Oblivion via Steam, you just need obse_0021.zip. Unpack the file(s) into the Oblivion game directory. Installing OBSE is absolutely necessary, as most mods simply will NOT work without it.

7 - Download and install "Oblivion Stutter Removal" (LINK) *This is a repacked file as well. It includes all files needed in one zip.
Unpack the content of the .zip file to the Oblivion game folder.
*Link to the original mod page (No download needed): (LINK)

8 - Download and install "MoreHeap" (LINK) *This is also a repacked file that includes all files needed in one zip.
Unpack the content of the .zip file to the Oblivion game folder.
*Link to the original mod page (No download needed): (LINK)

9 - Launch NMM
At the very first startup, NMM will search for your game(s). Let it finish, or cancel the auto-search and type in the Oblivion folder path manually. Then you will be asked where to store the mod files. Any place will do.

10 - Make some coffee. Downloading and installing all the mods will take several hours, so be prepared. However, at the end you will get the result of several months worth of tweaking and testing.

When ready
Proceed to the Mod-List

 

 

Curious if the results are worth the effort?  - Here are some before/after screenshots.
*To take "before" screenshots, I would have to uninstall every single mods again, so I found some screenshots on Google and Bethesda's site instead, then I took a similar shot with OBP ENB settings enabled and all mods added. It's difficult to match the exact same shot with location and time of day, but these should be good enough to give an idea.
 

ENB 1.81 Screenshots

                      BEFORE                                             AFTER                                                      BEFORE                                              AFTER                      .