Oblivion is simply unaware that it is not making full usage of the processor. To put it in very layman terms, what is 100% usage for a single core processor is only 50% usage for a dual core processor, but Oblivion does not understand that. Half both cores at half-usage is equivalent to having one core at full usage, and that's all Oblivion can discern.
Once again, this is a very watered down explanation and I may have glazed some facts, but it should give you the general picture.
Also, the processor models do not matter, they were used only for descriptive embellishment to help with understanding the idea. Pentium 4s are most commonly single-core processors, whereas the Core IX and Core 2 models are most commonly multi-cores.
hmmm... It just makes more sense to me that if more than one core are sharing the work load of the same process... The result would be that the process targeted should run smoother because less work load is stressed on a single core. Kinda like Raid0 carries boosted performance as well as SLI/Crossfire. Components working together to fulfill the same task. This is my very layman interpretation. But it seems logical.