Installing it will mess up any current Oblivion game you have. All the answers on how to avoid this are described in http://www.gamesas.com/topic/1305295-nehrim-and-mods-iii/.
That's not true. Nehrim get installed in a different folder and doesn't touch the Oblivion folder. After installing Nehrim you can play Oblivion without problems.
To be honest, when I installed Nehrim there was only 1 choice: "Install in a separated folder".
I don't know if the "Overwrite Oblivion folder" has been removed or was not available for me for whatever reason.
IMO, Nehrim is 100 times better than Oblivion. I suggest everyone to play it