There is no "best." But my favorite overhaul is http://www.nexusmods.com/oblivion/mods/42780/? The best part about MOO, in my opinion, is that it is extremely configurable. A set of .ini files allows you to tweak the mod to an amazing degree.
In addition to the usual enemy, armor and weapon additions, it adds warring factions that fight for control over Cyrodiil. You can join these factions and fight on their side, and as you rise in the faction ranks you can recruit followers. So , for instance, you could join up with bandits and rise to become a bandit chief with your own band of bandit followers. Or, conversely, you could join the Imperial Legion and fight bandits, ect.
The mod adds Notice Boards in towns, where you can pick up jobs. Thieves may steal some of your items when you sleep (you can chase them down and get your gear back). Certain materials do more damage to certain enemies. There are Runeskulls you can use to enchant your gear. Enemies roam in a larger radius. They may flee if their health gets low and they may alert their friends when they flee.
The mod adds airborne diseases. Ore and gem nodes you can mine. You can shear sheep, cut down trees, skin animals for pelts (all of which can be used for crafting a wide variety of objects). You can craft your own pressure plates and lay them down for enemies to step on. There are treasure maps that will lead you to buried treasure. You can tame creatures. Bash locks. You can climb (and many enemies can climb as well).
These are just a few of the things Maskar's mod adds to Oblivion. And, as I say, most of it can be turned on or off or adjusted to suit your taste. Maskar is still working on it (a new version just came out a couple of weeks ago) and he is very approachable and receptive to ideas. I highly recommend it.
The only overhaul I liked was Nehrim but then again that changed the whole game.
I do not use any overhauls when playing Oblivion.
Some people like OOO
Some like FCOM
Some like Maskar's .
I like using Maskar's with OOO.
This adds the dynamic features of Maskar's with the new quests of OOO. Just an excellent combination.
Maskar's is also compatible out of the box with OOO.
Don't OOO and Maskar's change the same thing? Won't that cause issues?
What settings should be changed for OOO/FCOM?
None because Maskar has already provided the comparability settings straight out of the box.
Yep, Maskar provides "compatibility INI's" right in the package. If you want to run OOO and Maskar at the same time (highly recommended), you have to no absolutely nothing. All changes are provided right out of the gate.
Does he now offer pre-configured ini files for compatibility with certain mods like OOO? That's sweet. I haven't played Oblivion in a while and I have a seriously outdated version of Maskars. He's got so many new features, I need to update to the current version and start playing Oblivion again.
Yep. Maskar has already identified the conflicting features (such as container traps, lock bashing, GMST changes, etc.) between the two mods and changes those in MOO. You don't have to do 1 single thing if you want to run both OOO and MOO. You can, of course, but it's install and play.
Well, what things do you want to change? You are the only person who can determine what mods you need. The worst thing any mod user can do is dump a bunch of mods into a game simply because other people use them. Tell us what you want to change about the game. We can suggest mods that will make those changes.
Regarding spells, there are three main spell overhauls. Supreme Magicka, LAME and Kobal's mod (can't remember the name). They are all good. My preference is Supreme Magicka since it is the most customizable and has more new spells than LAME (you can actually use both Supreme Magicka and LAME, but I personally don't recommend that).
Supreme Magicka has an ini just like Maskers and you can adjust its features. LAME is less extensive than Supreme Magicka and Kobal's mod is more aimed at balancing things than roleplaying. So if you are more of a min maxer, you may prefer Kobal's mod but if you are more of a roleplayer who uses self restraint in lieu of balancing mods, then Supreme Magicka may be right for you.
Like Pseron said its all up to personal preference and we cannot tell you which is right for you without knowing what you want to change.
P.S. If you do use Supreme Magicka with MOO, then you need to either turn off the regional specific summons in the Maskar's ini or follow Maskar's instructions for updating Supreme Magicka for compatibility with MOO.
Sounds like you may want one of the three magic mods I mentioned above. You will have to decide which one.
For UI, I like http://www.nexusmods.com/oblivion/mods/1825/?. Most people prefer Darn, but Darn is too small for me to read the text, so I prefer BTMod.
Other mods you may want to look into are Enhanced Economy, Realistic Leveling and All Natural Weather. Oh, and http://www.theassimilationlab.com/forums/files/file/1070-elsweyr-anequina/. I love the new province.
To fix the UI, I'd recommend DarN, DarkUI'dDarN (my preference), or Phinix Immersive Dark UI. I've never tried BTMod, but check those out on the Nexus. Take a look at screens. That should give you an idea. You'll have to install them and play the game to truly appreciate what they bring to the table.
The only mod I've ever used that offers crafting is Maskar's Oblivion Overhaul. And it does it well. You can craft armor, weapons, clutter; most things can be crafted, to be exact. There are other mods, but I can't remember the names.
Maybe try Harvest Containers (built into OOO, should you go that route) and Harvest Flora (not built in to OOO, note) ...
I would be careful using it though. If you are like me you might get sick within a few minutes of using it. I can not even watch videos if the player is using that mod.
Another very good overhaul (a little old and maybe less known, but amazing !) : " WAC: Waalx Animals and Creatures"
You can use an ENB or Oblivion Reloaded for Depth of Field. Or the older OBGE. Timeslip did a real old DoF effect, if you don't want to go with mods that add more than just depth of field. But, I don't recommend that old one. OR, OBGE and ENB do DoF much better.