I decided to go for a stealth/magic combination - at least that way I could still fall back on something familiar in the event that bows, arrows and daggers weren't quite working for me. I chose an Argonian male and breezed through the tutorial in no time, pausing only to practice my marksmanship on the bucket of the old well in one of the first rooms (bringing back some delightful E3 memories, but I digress!)
Anyway, sooner or later I found myself on the road to Cheydenhall (avoiding fast-travel like the plague). En route, I stumbled across Fort Nikel and decided a little adventuring couldn't hurt. (I'll play it out as I perceived it at the time). I entered through the main gates and began decending, quickly noticing a Nord guarding the entry to the main hall only a few feet away, who I took down with a surprise arrow to the back and another to the head to finish him off. I then took the path to my left and found myself behind a Breton marauder standing against a railing, looking out in to the water below. Again I ducked in to sneak mode and planted an unexpected arrow to the back of his head, resulting in a spectacular front-flip over the railing before him and a mighty splash as he landed in the water below. I never realized how satisfying archery in TES could be! I then noticed another Nord on the far side (who was obscured by the one I just killed) and gave him the same treatment, only this time taking two arrows as opposed to one.
Suddenly, the 'battle' music flares up and I think my cover has been blown, I run backwards expecting marauders to jolt around the corner at any second. Then I notice something odd - they're attacking eachother! I move forward to get a better view, and sure enough, there's a Dunmer and an Imperial battling it out on the platform below me. Going against all logic of how the AI works in Oblivion, I somehow thought "Jesus, the Dunmer thinks the Imperial killed the Nord!". Something moves to my left - Another Imperial (how the hell didn't I notice him before?!?) is climbing out of his bedroll to investigate the racket about two arm-lengths away from me! Without even thinking I plant another arrow straight in to his head (luckilly I was still crouching and got the 3x bonus), killing him instantly. I bolted down the stairs to the Dunmer and Imperial, swords drawn and swinging like there's no tomorrow. I arm my bow and point back and fourth from one to the other, not sure who to shoot (Just like out of the movies - "I'm the real X, shoot her!"). I flip a coin inside my head and release the arrow while aiming at the Imperial, at the EXACT moment he kills the Dark-Elf, resulting in two bodies splashing in to the water to join the floating Breton.
I stood there in awe. It all happened in a period of about 15 to 20 seconds, just like that. It was, without exaggeration, heart-beatingly epic. All these years of playing Oblivion and I'm STILL amazed at it's re-playability. I can't express how stupid I feel for never exploring stealth-based combat until now: Hats off to you, Bethesda! (I've learned my lesson!)
Anyone else got any epic stealth-battle tales to share?
(Oh, and just for hindsight - It wasn't until after the conflict that I realized the Dunmer was actually a bandit while the imperial was a marauder. Somehow, they just hadn't noticed each-other until I took out the rest of the bandits! Regardless, I deemed it worthy enough to come out of a state of lurking and actually sign up for an account, and that says something).
EDIT: Spelling/missing detail