Right, I just tried to install OBMM and it says "OBMM must be installed to Oblivions installation directory". How do install it there? I don't know what it actually means.

It means that you have to choose the directory where Oblivion.exe is located.

It should find it itself, but your other thread indicates that your Oblivion install is messed up somehow.

I'd uninstall Oblivion and all traces of it, then reinstall in a new directory if it won't mess you up too badly. It should sort out your registry issues and allow you to install any necessary patches.

I'm going to uninstall it for the second time today. Where should I install it to instead of program files?

Just make a folder called "C:/Games/" and install it in there.

Anywhere other than Program Files is good.

But, after you uninstall it, delete the Bethesda Softworks folder from your Program Files directory, and the Oblivion folder from your "My Documents/My Games/" folder (copy the Saves folder in there if you want to preserve your saved games). Then install the game again, install the patch (if not using the GOTY edition....if using GOTY make sure to install both discs), and install Obmm.

OBMM should automatically detect the correct folder for your Oblivion install.