It seems to me that everytime my character is in a fight, I only hear the same 2 battle song tracks, and I'll have to admit, the battle song scores in Vanilla Oblivion are kinda boring to me! So is there any mods that adds new epic battle music tracks that only activates when in a fight/battle/being attacked/chased by an enemy?

Search on Nexus under Music category. You fill find additional music tracks, as well as replacers (I suggest using the former). Frankly, you can add any mp3 file to the Data\Music\Battle folder, and it will play. The more tracks you have, the more variety you get.

Theres no mod like that, but instead, copy any mp3 file to the Battle folder, within the Music folder located in the Data folder of your Oblivion install.

As the others said, you can either search on TES Nexus under music for a replacer or addon, or you can add your own music by just placing the track you want for whatever you want it to play for. (Nothing beats battling creatures in Morrowind to some Folk Metal :spotted owl: )

I myself also recommend adding on some music to the originals. A good start is this musical masterpiece known as the http://www.tesnexus.com/downloads/file.php?id=11436.

I myself have a number of musical addons installed:
http://tesnexus.com/downloads/file.php?id=21176
http://tesnexus.com/downloads/file.php?id=11436
http://tesnexus.com/downloads/file.php?id=4186
http://tesnexus.com/downloads/file.php?id=8033
http://tesnexus.com/downloads/file.php?id=4191
http://tesnexus.com/downloads/file.php?id=4192
http://tesnexus.com/downloads/file.php?id=4189
http://tesnexus.com/downloads/file.php?id=14765
http://tesnexus.com/downloads/file.php?id=24160

and, of course, possibly the most important of them all:
http://tesnexus.com/downloads/file.php?id=12909, which adds tracks of simple silence where you can finally get a chance to hear the beautiful and violent sound effects you never knew existed.

This one is under Overhauls:

http://tesnexus.com/downloads/file.php?id=26892

(I don't particularly care for that author's 'helpful' attitude though. You can see the pattern with people across all his thread forums. Anyone that tells him that they have read the readme, etc if they have a question gets a curt read the readme reply. I started off with a simple statement of reading everything and asking if I happened to miss something where if it could have been that mod that keeps returning my music volume to 30%. I searched the ini and found no function for that. I haven't used it for anything other than setting the combat music fade in/out feature; just the default install. I wound up just editing my Oblivion.ini again. The in-game slider just doesn't stay put without doing that.)

Easiest way is to create your own archives (or download some, whatever) of MP3 files, and install them via BAIN (i.e., right click and choose "Install", in BAIN) - that way, if you write over any original Oblivion music filenames (as well as, possbily, adding other filenames), you can very easily get them back should you want or need to (i.e., right click and choose "Uniinstall" on the offending archive).

Personally, I use Better Music System, because it is just awesome, and even works fantastically well with mods such as the ULs and Anequina. I love it! And... don't have any issues with it, but YMMV, if the interwebs are to be believed.

There used to be a couple of great threads about track selection, including one specifically about music for BMS, or regional music in particular even (one of the functions BMS offers). But, Beth's forums being nigh on unsearchable as they are (even via the esteemed Google)... yeah, best of luck finding them, and I mean that sincerely.