Can someone help me, how do you install version 1.35 with OMM?

This is copy/paste from the mods main page - http://www.nexusmods.com/oblivion/mods/44629/?

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OBMM Install
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Installing the Mod

1. Extract the archive to any other folder.
2. Copy the extracted archive to [Install Path]\Oblivion\OBMM\Mods\
3. Start Oblivion Mod Manager
4. Click the Create button
5. Click the Add Archive button, navigate to the archive and select it, then click the Yes button.
6. Click the Create OMOD button, wait until it finishes, then click the Ok button

Activating the Mod

1. Start Oblivion Mod Manager
2. Double-click the name of the mod in the right-hand side of the OBMM screen, once installed the mod icon will turn blue

This is where im confused there are two files a base and a bsa. when I extract them they dont show up in the add archive in omm

Well I'll admit instructions are a bit unclear....nvm. You need both. First main file is archive containing base and required plugins, like Oscuro's_Oblivion_Overhaul.esm , Oscuro's_Oblivion_Overhaul.esp...etc. The second file is archive (i think so, didn't download it so not sure 100%) containing resources which are in .bsa file. Also required. If .bsa file is not in archive, just use one of the tools for archiving, like 7zip, WinZip, WinRaR.

So now you have two archives. After you finish creating .omod's you'll also have two of them. If you don't want your \Oblivion\OBMM\Mods\ folder cluttered with several .omod's which belong to one mod, you can extract these two archives in a temporary folder and then create one archive with .esm, .esp's and .bsa in it. This way you wont have to repeat the process twice.

So,

When you open OBMM just click on create > add archive, then navigate to these two archives, or one if you created a new archive like I explained above, and hit Open. It doesn't matter where they are located just navigate your way to their location. OBMM will add them so it can create an .omod. When adding large archives, like this one with .bsa in it, OBMM can slow down a bit or even freeze for a moment. Just wait until it finishes. When it finishes adding archives, you will see their contents listed in OBMMs window, click on "create omod" in the lower right part of the window. If it asks you to fill in details...author...etc, you can do that or you can disregard it, it doesn't matter. Wait until it finishes compressing and it will inform you that you created an omod successfully. After that it will apear on the right side of the OBMM main window, double click on it to activate it and then on the right side of the OBMM main window tick the box next to the Oscuro plugins so you actually activate the mod.

Same goes for Oscuro's addons download. Now that I wrote this essay I'd suggest that you install this MANUALLY since all resources are packed in a .bsa so you dont have to worry about uninstallation and dealing with loose files. Just drag and drop everything to your DATA folder and activate them in the launcher.