I want to start using mods in Oblivion (I've been using them in Fallout 3 for quite some time) so I downloaded OBMM then I downloaded http://www.tesnexus.com/downloads/file.php?id=1965 omod version and loaded it to OBMM it then appeared with a green square next to it so I clicked activate and the square became blue, I figured it would be good to go but upon starting Oblivion I noticed the mod didn't do anything so I went back to OBMM clicked Natural_Faces_v95_OMOD-1965 and then clicked create then from there clicked create omod, a new mod appeared called "MD Natural Faces v0.95 0.95" I thought it must've worked this time but no it still had no in game effects. What am I doing wrong? :shrug:

You aren't doing anything wrong. Install Natural Faces via OBMM. Then go to your textures folder and be sure the files are there. If they are, be sure to activate some form of Archive Invalidation. I recommend http://www.tesnexus.com/downloads/file.php?id=10724. It is a set it and forget it mod.

I'm not 100% sure if Natural Faces requires Archive Invalidation. So another possibility is that the mod works, but you expect the faces to look different then they do. But I suspect it is AI.

From within OBMM, click the Utilities Button on the right, then "Archive invalidation" from the menu.

Set mode to "BSA Redirection" if it isn't already.

That's it, really. Archive invalidation will now be handled for you, and your texture replacers will show up.