Not an issue; just a question.

Short answer: No.

Longer answer: Oblivion is supposed to be able to make use of dual cores, but it does this so badly that there's no point in even calling it multi-core aware. This limitation extends to Fallout 3, and even (I'm not too sure but it sounds reasonable) New Vegas. Outdated engine who's parent company folded, plain and simple.

I seem to recall reading about changing CPU affinity to just one core could in some instances increase the game's performance even. This doesn't work with FO3 or FNV though. If I force my i7 to run on 1 core with NV (or two physical cores, or 1 physical and one virtual/HT core) the performance is much worse than with all cores so they must've opitmized it over the years. The engine is composed of gamebryo for the environment, speedtree for tree gen, face gen for faces, facefx for lip animations, and havok for physics so in theory each of those could run on separate threads (and in some cases they do, but it's not always efficient to do that because one core might get done before the other)

Short answer: no.

Long answer: As much as I'd like to say Oblivion can make use of more than one core, the engine specifies only "multi-threading", which is possible even with one core (HyperThreading, anyone?). I can't find real evidence of Oblivion using a second core. Also, it multi-threads only for stuff like SpeedTree and Havok, none of which computationally intensive (just look at how a body falls at only a constant 1 meter per second)

Fallout 3 is multi-core capable, only the game engine itself is a bit outdated, so I think no huge boost in performance, but will help remove the wandering question "how the hell can an i7 struggle with Oblivion?"

Right. FO3 and FONV use over 40 threads according to take manager which is twice the amount of what oblivion uses. Oblivion came out right when dual core CPUs were going mainstream. Even in 2010 most games primarily use one core although the multicore speedup is much more noticeable now with modern games

Unrelated, but in the past I experimented with the threading options in the .ini file and it didn't do squat. Same with the fallout games. In fact in some instances modifying the .ini decreased performance (such as background loading which is endorsed by the tweak guide to reduce stutter when in fact in increases load-related stuttering cause the game loads assets while you are playing it instead of the loading screen)

Restricting the game to one core, but, allowing the O/S to play with the others is supposedly good for a performance boost. Oblivion doesn't make use of multiple cores for itself, having more than one core allows the O/S to make use of the others for stuff IT wants to do.

As strange as it sounds, I tried to do that just yesterday: I changed the affinity of every other process (even Windows processes) to CPU1, while only Oblivion uses the remaining CPU0 (giving it FULL capabilities of the core) and I don't see much improvement :shrug:

Mine is E4600 Core2Duo @ 2.4 GHz, I guess 2.4 GHz is not much...