I voted "Yes" since I would LOVE the idea to be have my Oblivion character as an ancestor to my Tes V character.
It could work like this.
When you create a new game in Tes V it looks for an Oblivion save on your xbox and then you can choose the character you want to pick. Once you have made your choice you Must create a new character with the same race, a Breton character from Oblivion would force you to be a Breton in Tes V aswell for example. Now this could work since some people (I know I do) want to play with a similar character as we did back in Oblivion, and I know staying alive for 200 years can be tricky, but if the character in Tes V were to be a blood relative in the direct line of descent from the mighty hero/heroine of Cyrodiil then lore wise it could work out.
Now transfering epic items from one game to another would just be weird. Maybe not lorewise (since one could inherit the artifact in question) but more gameplay wise. Instead, the new character could get a perk or a title of some sort showing the young newblood's old ancestor's legendary status. Or maybe an item of choice could be transferred over but without it's stats?
I know I will create a darkelf as I did in Oblivion, and I would not mind if it turns out the two games won't have any kind of relations between each other.
But it would be cool to get something for all the 100+ hours one put into Oblivion, I do not ask for much but at least give us something
Any ideas/suggestions?