I have

OOO
Living Economy
Realistic Leveling
Race Rebalancing Project
Less Annoying Magic
The Lost Spires

Frostcrag Spire and
Patched game..

When I downloaded the omod for the official oblivion patch I could not select it with create and archive.. Then I double clicked the UOP and it went into the mod manager. However when I click activate omod it says there is a conflict with one of my other mods. How should I proceed from here? Is there something wrong with what I am doing? Should I save my oblivion folder so I can revert back? I already have oblivion folder to revert to a pre-modded game and I can always just go back.

Big question is will my saved games and character progress be screwed up and need repeating if I make a mistake? I don't think so..

UOP conflicts with OOO. The conflicts are just data file conflicts, so you can ignore them. Install OOO after the UOP. If you have already installed OOO, just hold down CTRL as you click 'No' when prompted to overwrite (during the UOP install.) That gives the same end result as if you had installed the two in the "correct" order.

In the future - http://tesivpositive.animolious.com/?page=installing_mods

Don't pay too much attention to the conflict reports in OBMM, almost every mod you add to your game will show some sort of problem. But that doesn't mean that it will screw up your game, just that the one mod will overwrite what another is adding. Usually whichever mod is loaded last in the list will win, without messing up your game at all. Only occasionally does that end up causing some sort of glitch in your game. As Tomlong just load OOO later in the list and there won't be an issue. You should have UOP near the top of your list anyway so that other mods can overwrite portions of it if need be.