I understand that you level up in this game when you earn 10 skill points in any major skill, Or a combination of skills governed by an attribute. What I don't understand is how I can get a 5/5/5 Bonus when I will automatically level up when I hit 10? You know, Like if I get 10 skill points, Thats a "+5" bonus, But won't I level up then? How am I suppose to earn 30 skill points when the levelling process will happen at 10?

You level up based only on major skills.

You get attribute bonuses based on leveling up major and minor skills.

Partially correct. 10 major skill increases contribute to character level up and only major skill increases, nothing else. Where the combination of skills governed by attributes comes in is with the +5/ +5/ +5 attribute bonuses. Each attribute (except luck) governs 3 skills (i.e. Strength governs blade, blunt & hand-to-hand). To get the +5/ +5/ +5 attribute bonuses, you have to increase skills 10 times for one governing attribute to get the +5 bonus and you have to do that before major skills increase 10 times for the character level up. Major skill increases will contribute toward the attribute bonuses to be distributed at level up, but you also have to increase minor skills enough times to get +5 bonus to 3 attributes of your choice at character level up.

So for example, you have to get 10 skill increases between conjuration, mysticism, and alchemy to get a +5 bonus to their governing attribute of intelligence. 10 skill increases between blade, blunt, and H2H to get a +5 bonus to their governing attribute of strength. 10 skill increases between marksman, sneak, and security to get a +5 bonus for their governing attribute of agility. You get a choice of 3 attributes to increase at character level up and only 3 for each level up. If you increase skills 10 times within a governing attribute, you will have a choice of giving that governing attribute an increase of +5 at character level up. Don't forget that some of those skills that you increase may be some of the major skills that chose when you made your character. So, to get 30 skill increases by the time 10 of your major skills increase, you have to increase the corresponding minor skills 20 times.

Strength governs: blade, blunt, H2H
Intelligence: alchemy, mysticism, conjuration.
Willpower: destruction, alteration, restoration.
Agility: marksman, security, sneak.
Speed: light armor, athletics, acrobatics.
Endurance: block, heavy armor, armorer.
Personality: speechcraft, mercantile, illusion.
Luck: none.

Hopefully that clears up things some?
If you need more clarification, perhaps list your character's major skills and someone may be able to use that as an example as to how to get +5 bonus increases to 3 attributes at level up?

Edit: note that when you increase 10 major skills and your character is ready for level up, you cannot increase any more skills to get better bonus increases to your attributes for that level.

You're right it would take at least 30 skill points to get 5/5/5. But as mentioned by Acadian above minor skill count towards the attribute bonuses.

So at least 20 of those 30 skill increases should be in minor skill associated with the attribute you want to level.

This is why it's good to have some of the skills associated the attributes you'd like to raise as minors, not majors. game is a bit counter intuitive in this, and is one of the big flaws in the game.

This means it is not beneficial to put all skills associated with and attribute you want to focus on as majors. For example, let's say you have a warrior and want it increase strength. So you might think it would be good to put all three strength skills (blade, blunt, hand to hand) as majors. But that actually works against you. Because to increase strength with a +5 bonuse you need 10 strength skills. And so if you get a major skill increase in any non strength skill you will not be able to get a 5 bonus. However if (for example) blunt was a minor and Blade/Hand to Hand where majors you can. You can simply increase blunt 10 times be for getting 10 major skill increases. Then you are assured of a +5 strength bonus not matter what other major skills you increase.

It is unnecessarily complex. If you are playing on a PC you might want to consider the nGCD mod, which is an excellent way of getting more natural leveling.

It is not necessary to get optimal attribute increases to do well in the game. However if you want to, then this link might help further:

http://www.uesp.net/wiki/Oblivion:Efficient_Leveling

The simplest approach, which works perfectly well, is to just play the character as you see fit, and take whatever bonuses are available when you level up (a good idea to raise Endurance early and as much as possible.)

Then, as you level up, when you run into the infamous "Leveling Problem" where enemies are leveling up stronger than you (and you WILL run into it!), just adjust the difficulty slider to the left of center. The ONLY thing affected by Oblivion's Difficulty Slider is the ratio of damage given/taken in combat; it affects nothing else in the game.

If you get to a high enough level in this game, battles become long drawn-out affairs against very tough enemies, because level-scaled enemies keep gaining health as YOU level up. There is very little advantage to leveling above about 25 or 30 in Oblivion.

I see. This explains things! WHAT A COOL GAME!!! [So Far Anyway...] Thanks everyone.

I am finding that would be the whole point of gaining maximum bonus points. Its like a reward for relying on your minor skills, And putting in the time to raise them.