Seriously?!?! I have no issue with the slew of other games that I own so I highly doubt there is an issue with my hardware or drivers(BF3, Deus EX HR, Crysis 2, MW3, Metro 2033 etc. all run completely fine...even older XP titles work fine such as Rainbow Six Vegas 1 and 2). So now I am down 75 bucks instead of 60 on Bethesda software that I cannot enjoy. BUT HERE IS WHERE THE STORY CHANGES.......
So if you are like me and running win7 x64 bit and this is happening to you go into your program filesx86/steam/steamapps/common/oblivion/and change the launcher and I did the application as well but I think only one needed the change and set to XP compatibility mode and also set to run as administrator. This should remedy your issue. I also have UAC turned off as well as I read it causes issue with Skyrim on win7 64. You can do that in control panel User Accounts but I would try the first fix see if it works for you if not then turn off UAC.