First let me say, when I used the disc based version I had none of these problems at all, but I had gotten Oblivion GOTY on steam (which is installed at C:\Games), but since I've been using steam it seems like archive invalidation invalidated doesnt work at all. Often time I put in texture replacers and they dont show up in game, and even completely BSA based mods like Lost Spires gives me Pink objects. Problems invisible or pink people and other fun stuff. I was able to fix most of that however by using a tool to generate a archiveinvalidation.txt file, so obviously my textures/meshes are properly installed if that text file gets Oblivion to recognize it, but I still have minor issues, mostly with BSA based mods. Is there problems with steam and oblivion? does anyone have any ideas?

Thanks

Are you using BAIN or OBMM? I have avoided actually using Steam myself because I do not have to, I consider it an option if I have a hardware failure (again).

I use OBMM, but i've also tried that achiveinvalidationinvalidated installer on nexus, it use to work in the past, at least with the retail copy.

I have steam and a texture pack & various other mods and I have not faced any problems with it. My install location is the steam default one though (and Vista 32bit).

I guess this does not help you at all. But my guess would be that the mods/modding has gone wrong for you more than that it is something caused by Steam.

I might be completely off though since I only have myself to go from.

Do you have Bsa Redirection selected in OBMM? Applying the reset Bsa timestamps should fix the problems, at least until you add a new mod. I just find it wierd that it is not working on a Steam install.

Yes, OBMM has BSA redirection Active. I didnt try the timestamp thing, what is that?

In the Utilities section under Arcive Invalidation there is a button that will cause OBMM to reset the dates on all Bsa files so an individual mesh or texture will be allowed to overwrite its "twin" inside a Bsa file, many mods with meshes and textures can have thier changes prevented from working in the game if you load a mod with a Bsa after the mod with the meshes and textures.
This is also the reason many smaller mods will say "install last to ensure this mod will work in your game", especially mods made by someone new to modding.