I am having issues with Oblivion, as it doesn't seem to wanna apply my graphics options. It seems like it's constantly set to medium, even though I adjust it to ultra settings. It doesn't recognize my hardware, but I should be able to max it, as I run skyrim on high decently.
Specs are as follows - Amd 3870k 3.1 GHz (Integrated card- Radeon 6550D), Corsair Vengeance 1600 Mhz 8 GB (4x2), gigabyte a75m-ud2h. I have also tried to install view distance mods, but they do not seem to work. Does anyone know a fix for this?

I cannot post links on this forum, so I cannot really get my point across.

Incidentally, you may want to re-examine the documentation and receipts for that laptop. The numb4er "6550 D" does not appear to exist. There is, in fact, an HD 6520 G, however:

http://www.notebookcheck.net/AMD-Radeon-HD-6520G.55734.0.html

Oblivion has a table of numbers it uses to configure things, and the one you have is repeating the same old (family) number that nVIDIA used before Oblivion was released. The Geforce 6500 was pretty bad; your APU's graphics aren't high end, however, not even for a Game like Oblivion (if it is the 6520 G). It's Skyrim that has such low requirements to allow you to run a (relatively) Low End part as if it was Medium.

(If your laptop has BOTH the integrated graphics, and a dedicated CARD, it may instead have an HD 6550 M, which is a relatively middle of the road medium CARD.)

Im not on a laptop, I am on a desktop. I'll get a 6950 sometime in the next three months though.

It's an APU.

The Llano is not as good of a choice for a desktop as for laptops, but TTBOMK, AMD hadn't split the Llano APUs into separate desktop / laptop branches. However, if Notebook Check never heard of the 6550 "D" model, that splitting possibility exists. Passmark ranks it BELOW the laptop card that I already posted a link to among Notebook Check's "Entry Level" low end cards.