Trying to run OBSE v0021 with steam, but according to OBSE Tester, OBSE is not activating.

I did the steam install, only getting the obse_1_2_416.dll, obse_editor_1_2.dll, obse_steam_loader.dll and the Data folder. I've tried launching the game via the launcher and the EXE itself, both as administrator, and without it.

Does it just not work with steam? If that's the case, is it possible to get refunds from steam?

No such option is in that menu. The closest is "Enable the steam overlay while in-game" which is checked.

You don't launch OBSE with OblivionLauncher.exe or Oblivion.exe. You launch it with obse_loader.exe.

Yup, you want to use the loader file. You can even make obse_loader.exe into a shortcut to your desktop, and then right-click on this desktop icon. Now go to Properties > Shortcut > Change Icon > Browse > Oblivion folder (whatever you call the folder where your main Oblivion files are), and then find the Icon which matches the game. Now you've got http://icons.iconarchive.com/icons/th3-prophetman/game/256/Oblivion-icon.png to click on, instead of whatever OBSE gives us.

Edit: also, make sure you didn't install Oblivion into Program Files, or Program Files(x86), or any other pre-made folder your computer comes with. Make a custom folder outside of Program files instead. Make this folder in your C directory (usually It'll be C). The reason for this is complicated to explain, but this is necessary to make a modded Oblivion game work smoothly, most of the time.

@Wyde and Gade

The Steam Version for the game does not use the OBSE_Launcher. As per the Readme in OBSE

That's the correct option. Steam just changed the wording awhile back. Make sure it's checked. Then make sure you can open the steam overlay once you launch the game (Shift+Tab).

This is really important, especially once you start running into problems like OBSE not working.

Yup. I don't know about OBSE tester, but are you running any obse mods that aren't initializing? Also try opening a save game (or starting a new game) and then create a new save (not an autosave or quicksave) then quit. Now if you go to your save game directory (usually in My Documents\My Games\Oblivion\Saves), you should see 2 files for the save you just made, one with a .ess extension and one with a .obse extension. Do you? Also go to your Oblivion directory (the one that has Oblivion.exe) and you should see an obse.log file. It's just a plain text file, but you should make sure it's there and open it and see what it says.

The save folder has no .obse file. only the .ess and a single .bak

There are also no log files in my oblivion folder.

Ahhh dangit. Sorry about that . [censored]ing Steam.