If you don't yet understand the difference between Install Order' (IO) and 'Load Order' (LO), then I'm going to suggest you read the following, even the parts you think you know already.
Here is some standard reply to similar questions. Just skip what you already know. But if you have been gone for more than 1-2 years, you might be best served by re-approaching the game as if a first timer and start from the basics, especially if stability is your primary concern.
First of all, we don't know what kind of experience you have with computers or modded games in general, but even professionals with DECADES of experience have a lot to learn to get a stable modded Oblivion game going. This is not like a console game where you simply plug-in a module and are up and running, and is much more complicated a modding environment than Morrowind. There are all sorts of non-obvious interactions going on you have to become aware of. Most of us are simply gamers who want to get playing as quickly as possible. This is the minimum you need to know to get going with a reasonable chance of a stable game.
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If you aren't sure where your game is installed we need to step back and discuss some basics.
By default (meaning if you don't tell it otherwise) Windows will install anything to the 'C:\Program Files' folder. If you are running a 64-bit version of Windows then it will install 64-bit programs to 'C:\Program Files' and 32-bit programs to 'C:\Program Files(x86)'. Those folders are, as of Vista and later, now considered 'protected' and Windows actively works to prevent any changes to anything installed there, even by the program itself. See this article for details. [http://wiki.tesnexus.com/index.php/Installing_Games_on_Windows_Vista%2B] The point is, games to not work well when installed there. So you need to 'bite-the-bullet' and reinstall Oblivion elsewhere. Trust this community and our experience in this matter. This is by far the simplest and easiest long term solution. Trying to avoid it simply turns it into a more onerous chore later on.
When you install: do NOT select the default location or the 'Easy/Quick' installation choice. Instead pick the 'Custom' install choice. (It's there on every install screen, but you may have to look for it.) That will let you choose where to install the game, some place like 'C:\Games\Oblivion' or even 'Program Files' on another drive letter like "D:" won't have the problem. Among other things, this way you WILL know where the game is installed.
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Coming to the game at this point in time means you get the benefit of a lot of 'lessons learned' the hard way by our predecessors. But you have to take the time to study those lessons to take advantage of them. Which in turn means you will need more patience than with less complex games. If you aren't willing to spend the time, save yourself a lot of heartache and just play 'vanilla' Oblivion for a while.
Stability starts BEFORE you install mods. It can only go downhill from there.
The first of these 'lessons learned' is: you do not want to try to manually install mods unless you are willing to 'get deep into the weeds', where the 'weeds' are the technical details of how the main game engine works with mods.
Let's assume you install to 'C:\Games'. Then you will have a 'C:\Games\Oblivion' "install folder" (you can safely remove the 'Bethesda Softworks\' part of the path they want to suggest) and under that folder are sub-folders named 'Data', 'Saves', 'Screenshots', etc. Your mods will be installed in the 'Data' folder and some parts of them will be in other sub-folders found under 'Data'. You will have to examine the mod documentation to see exactly what goes where. This is the essence of 'manually installing'. It's messy and takes a lot of careful reading about each and every mod.
So instead you need to invest a little time up front in learning to use a 'mod manager', of which there are currently three choices. There are two front runners (Oblivion Mod Manager, abbreviated OBMM; and Wrye Bash, abbreviated WB), but only one real choice: which is Wrye Bash. (This is a subjective opinion but pretty much the consensus among the players with the longest stable games and/or the most active mods. And the more mods you install, the more likely you will eventually be forced to use WB to get them to work together.) NMM (Nexus Mod Manager) is an extension of OBMM, is still in beta, and doesn't correctly install most Oblivion mods, so we generally recommend avoiding it for that purpose. (It does work fine for downloading, just not for installing.) WB is still being maintained and improved, while OBMM is pretty stagnant and by design more limited. WB is more of a 'Swiss Army Knife' of tools, but because it does more it's worth the time to learn to use it. And fortunately you don't have to learn all of it's features at once. Start with the 'Wrye Bash Pictorial Guide' (below). While WB often scares people with all of it's features, just bear in mind you only need to concentrate on one part at a time. And the BAIN part of WB can install OBMM files, though it doesn't use the OBMM scripts. Begin your use of WB with BAIN (below).
The second lesson is that it is critical to get 'the two orders' correct: 'Install Order', and 'Load Order'.
'Install Order' refers to the sequence in which you install your mods. This is because the more mods you install the more likely a later one will overwrite something of an earlier mod. This involves what is referred to as 'The Rule of One': the last mod to 'touch' a record 'wins'. Only the last change to a record takes effect. But when installing, you aren't talking about 'records' but rather entire files. If you install a mod and then install another mod that changes some of the same files that make up the first mod, the second mod 'wins' ... always. It's version of those files are all that are there. And if there is not a 100% replacement of files between the two mods ... weirdness results. Fortunately most modders know they need to keep their mod's versions of files unique. And sometimes the mod is deliberately making changes to 'vanilla' Oblivion files, such as the 'Official' and 'Unofficial Patches'. Which is another important element of 'Install Order'.
The Wrye Bash [http://www.gamesas.com/topic/1411667-relz-wrye-bash-thread-95] 'Installer's Tab' is also called the 'BAIN' (BAsh INstaller) tab, and the order you place mods in BAIN determines your 'Install Order' (higher/larger number 'wins'). The major advantage of WB over OBMM is that if you install both mods and later decide to remove one (regardless of their order), WB/BAIN remembers which files were replaced and restores the ones they had replaced. OBMM can't do that. But WB/BAIN can only do it for mods that were installed through BAIN. If you manually install mods, then BAIN doesn't know about them and can't restore things. It will work with them but it will not 'manage' them. Consequently, planning and setting up your Install Order before actually doing anything is worthwhile and important. Please note you can setup the Install Order without actually installing or enabling anything in your 'Load Order', and then enable and test mods one at a time.
The 'Wrye Bash Pictorial Guide' (WBPG) [http://oblivion.nexusmods.com/mods/35230] is an excellent start to using WB. If you perhaps found WB too confusing before, both the Pictorial Guide and the new WB documentation should make you a happy new user.
What makes for a 'good' Install Order? Start with the Installation Guides on TECOSI [http://tescosi.com/wiki/Main_Page] and TweakGuides [http://www.tweakguides.com/Oblivion_1.html].
The 'Load Order' (LO) refers to the sequence in which mods are loaded by the game. The primary tool used for managing the LO is BOSS [http://oblivion.nexusmods.com/mods/20516 and http://code.google.com/p/better-oblivion-sorting-software/]. Wrye Bash's 'Mods' tab works together with BOSS to sequence your LO. Again, this is dealing with the 'Rule of One', but now on the individual record level. What Wrye Bash brings to the table is the ability to more finely tune 'what is touched', and thus allow more elements from different mods (even different elements of the same record) to work together. This is done through the 'Bashed Patch' (BP) and the application of the 'Bash Tags' provided by BOSS from the mod's author and automatically recognized by the Bashing process. You do NOT have to use the BP, but it is one of the major features of WB. (Normally you do not need to worry about the 'Bash Tags', unless you have a thorough understanding of their function and purpose and need to override those on a particular mod for some reason.) As you install more mods, or wish to customize more aspects of game play, it will be to your advantage to go back to the WBPG and the WB Documentation to read about it. But it is safe to ignore those additional features when you are just starting out.
Above all, add mods slowly and test each in-game before installing another, at least once you get past installing the basic game patches. This is the only reliable and simple way to ensure you know which mod has caused you problems. And eventually one WILL cause you problems. Plan ahead.
Removing a mod is fraught with hidden perils, because they usually have elements in your save game files that can only be removed (if at all) via the 'clean save' process. [http://www.uesp.net/wiki/Tes4Mod:Clean_Save]. Even if you think you know how to do so, there are a number of nuances that turned up. Strongly recommended reading for old and new players.
Here are some other threads that cover similar questions to yours:
New to mods [http://www.gamesas.com/topic/1395654-new-to-mods]
Oblivion and Mods Install for Win 7 64? Any Issues? [http://www.gamesas.com/topic/1395179-oblivion-and-mods-install-for-win-7-64-any-issues]
Time saving mods [http://www.gamesas.com/topic/1365890-time-saving-mods]
Top 10 Category Mods [http://www.gamesas.com/topic/1406163-top-10-category-mods]
There are tons of other 'collection threads' on a wide variety of subjects.
-Dubious-