Is there a way to fix the camera in 3rd person? It moves slightly more in whichever direction you pull it than you want it to. It makes me dizzy. Is there a mod, or ini setting that makes it less "lazy"?

Try this:

http://oblivion.nexusmods.com/mods/1840/?tab=1&navtag=%2Fajax%2Fmoddescription%2F%3Fid%3D1840%26preview%3D&pUp=1

I use the http://oblivion.nexusmods.com/mods/1840/?. I cannot play Oblivion without it.

This could be due to Mouse Acceleration. First, turn off the Rumble and Gamepad in the controls menu. See if that clears it up. If not, then try adding this to the controls section of your ini

fForegroundMouseAccelBase=0
fForegroundMouseAccelTop=0
fForegroundMouseBase=1.2
fForegroundMouseMult=0
iPresentInterval=0

and also set

bBackground Mouse=1 from 0

If that does not work, then you can try a mod that centers the third person camera, that might make it easier to deal with. See the links above