http://sites.google.com/site/oblivionpoinfo/tunesetup/merging <-- See the "Related Resources" for more threads on this topic as well
When you see mods names in green (in Wrye Bash) then it means they are 'mergeable' into the Bashed Patch, and do NOT need to be activated.
Copy the file Bashed Patch, 0.esp from your c:\Program Files\Bethesda Softworks\Oblivion\Mopy\Extras
to the data directory
Run Wrye Bash
Run BOSS from inside Wrye Bash
Click on the little icon 'Mod Checker' and uncheck the mergeable mods in the main Wrye Bash window.
Read warnings if they are present and solve the problems.
The new file, Bashed Patch, 0.esp should be very near the end of the load order now (unless you have activated locked time).
Right click on Bashed Patch, 0.esp and chose 'rebuild Patch...'
(You may get a notice to deactivate Filter Mods, click YES there)
This opens a new window, with various options. The important one for us now is "Merge Patches"
You can select all of the patches there and they will be combined in a single file, the Bashed patch.
Go through the other options at your leisure, the 'Import NPC Faces' is important
The Tweak section may be interesting for you too, it replaces several mods. (unlimited rings and others)
When you are finished selecting your options, click OK and wait for a few minutes.
You should have many free spaces now.
Whenever you install / activate a new mod it's recommended to run BOSS and rebuild the Bashed Patch. You don't need to go through all the selections again, it will remember previous settings, but maybe one or more new files have to be merged.
I hope this helps!
quasim