Framerate issues =/= bugs.
I have no framerate issues. If you are, turn your video settings down. I don't see why looking at a wall would do anything but increase framerate, honestly. I'm not sure what you mean by stutter, but the game has a lot to load, if you're in wide open areas, or a dungeon cell that is particularly large, then there are going to be times when the game needs to take a moment to load distant objects.
It's also worth noting that the game was made in 2006.
Actually, there is a point to be made here. Oblivion does not have the code needed to prevent objects you can't see from being rendered. You can specify a distance from the player where the game will stop rendering objects in interior cells, but anything that is not beyond that point is rendered, and therefore allowed to drag performance down, and it is not possible to do this for exteriors.
The code in question is call Occlusion Culling, and this is the main reason why FPS tends to tank badly when you install an AEVWD mod, because for whatever the range is specified for LOD objects to load in (based on cell grid), EVERYTHING (aside from the 25 cells the game has loaded fully) gets rendered. That data is then passed to the water reflections, and the entire scene gets rendered again (albeit at a lower resolution). The game does not have any code to prevent objects the player can't see from not being rendered, and considering the scale of the game, that is a rather serious shortcoming.
The stuttering is mainly caused by Oblivion using an archaic cell structure to determine what to load and render. Instead of smoothly streaming the models through based on the distance the player is from that specific object (for instance), the game instead loads everything in large chunks. Only some objects get streamed in this game, and even then, the game is still loading them into memory, it just isn't rendering them. Proper streaming does both (only rendering AND only loading the objects when they are needed, which Oblivion simply doesn't do the second part ever). Cells are displayed in full detail in a 5X5 grid at all times in the game, so that means 25 cells in total that the game is keeping track of at any one time. And because the game loads everything in blocks based on the player's distance from the CELL, this means that whenever the game needs to put more cells into memory, it is doing them in large groups based on that 5X5 gridmap with the player in the center. That means many hundreds (sometimes thousands) of objects are being loaded and unloaded at once when this occurs, and roughly half are being rendered, as well. That is what causes the "stutter," as most people have coined it, where the framerate makes large periodic dips into single digits while the game works to allocate new memory, load all the new objects into that memory, get all the new objects rendered, and unload the objects that the player is leaving behind him. That is a huge amount of work. It's not too bad with the vanilla game (because the world is actually pretty empty to compensate for this problem), but when you add in large mods, the stutter can become very noticeable.
The stutter remover in question works by replacing the methods Oblivion uses to manage that memory with more efficient versions. This helps lessen the stutter, but it will never be possible to fully remove it without rewriting the engine.
Oh, and one more tidbit: the game never lets go of any memory it has allocated for itself, and this is why the game crashes after you have played it for about two to three hours. (The game attempts to allocate more memory than the engine is capable of handling, and thus the program crashes).
Just a very tiny, very generalized glimpse under the hood for this game.
bliviongate: