In oblivion you could cast with a sword and shield.
In Skyrim you can't. You need a free hand.
Does this mean you won't be able to cast spells while holding a bow? Bows can be considered two-handed weapons (not referring to the skill "two-handed").
That's a good question. I think it would most likely be counted as a two-handed weapon as well. Though in Oblivion, when not using it to attack, the player would just hold a bow in one hand, which should give a free hand to cast, provided, again, the player is limited to one action at a time. It seems like it could go either way with that, though again I imagine it would be considered two-handed.