Most likely you're missing the registry settings. You may have to save that directory somewhere safe, reinstall from scratch, and then copy the saved folder back over top of the newly installed one.
there is only one reg key you need to get oblivion to work, bit nuts to reinstall it all for just that.
when i get home i will rip the key out of the reg for you. only thing is im running win7 64bit if your running a 32bit os the location in the registry will be different.