Is it possible for Oblivion to be installed in two directories and run independently of one another on Windows 7? For example, I have Oblivion installed once in C:/Program Files/Bethesda Softworks/Oblivion/ and then also installed, I don't know, somewhere else? And one directory uses the Documents/My Games/Oblivion/ .ini files and the other directory uses a different set? Not the most articulate way of explaining this but I think you guys get what I'm asking. I'm asking because I want to have one modded Oblivion installed as well as a vanilla Oblivion that I could switch back and forth between at will. As far as I know it's not possible, but I figured I'd give it a shot, this seemed like the most appropriate place.

http://www.gamesas.com/index.php?/topic/1142151-rel-mtes4-manager/page__hl__mtes4, an awesome little app that lets you create cloned copies of your Oblivion install.

Before you do that, do yourself a favour and uninstall Oblivion from your Program Files folder. Oblivion and Windows 7 UAC do not get along. Make a C:\Games folder (or something) to install to.
Make sure when you uninstall to delete the User Name\App Data\Local\Oblivion folder and the User Name\My Documents\My Games\Oblivion folder. If you want to save all your current game info then BACK THESE FOLDERS UP first, then copy them back over after you reinstall.

Wow, thanks! That's even better than what I was hoping for. I thought it was a stupid question but I'm glad I asked. <3