The new AI will also have it's downsides, NPC will get angry if you make a mess, no more walking into a house using fireball on the dinner table and the bookshelf then get greeted by the owner as an old friend.
Thats I have in Oblivion with mods
Put it in its Place - Enhanced Grabbing
http://tesnexus.com/downloads/file.php?id=19847
And thats will be awesome feature of for Skyrim Radiant AI
About OP post some improvement was done in Shivering Isles, thats strangely thats was not done in vanila Oblivion, mods partially fix it.