This sounds pretty awesome, indeed! But a few quick questions!
1. How will this go about when you use TES4LODGen?
2. Is this program compatible with 32 bit Windows Vista?
3. How will it treat Oblivion Mod Manager?
1. As long as the tools are installed into the oblivion folder (as far as I know, all will allow you to, most default that way), all the various oblivion tools should work. But only for the currently active clone. Some tools may work for inactive clones.
2. Yes. It should be compatible with 32 and 64bit systems running XP, Vista or Windows 7.
3. As long as obmm and your omod folder is installed into the oblivion folder, it will work fine. IE. The default setup works, but if you install obmm outside of the Oblivion folder, or you reconfigure the omods folder to be outside of Oblivion, then mTES4 will not swap them for you. (not good)
There is basically no special treatment for any tools whatsoever. Just remember than your oblivion game and all of its tools must be contained in the Oblivion folder, then there shouldn't be any issue.
Bash is the only tool that needs special configuration to work properly with mTES4, so the Oblivion Mods folder for each clone can be separate.
I'm testing things again and I was wondering if OBMM keeps its config within its tree. Looking threw this thread again, I didn't any problems but wanted to be sure.
Also, when upgrading mTES4, do I need to save the old config file?
See my response to The Duke of Spook.
When upgrading, just copy the extracted files into your mTES4 folder. IOW, you should keep your config file, unless you want mTES4 to create a new one.