Essential mods to be able to optimize and use mods
OBSE
OBMM
BOSS
Windom Earle's Oblivion Crash Prevention System (WeOCPS)
Fast Exit
Essential for smoother less annoying user interface
A Takes All (from containers)
Toggleable Quantity Prompt (included in some bigger mods like OOO I think; when transferring, shift moves all, control moves one)
Essential to improve some basic gameplay mechanics
Drop Lit Torches (activate your weapon with torch lit and you drop it, so the area remains lighted for the fight)
Enhanced Economy (makes the economy believable)
Harvest Flora (makes plants disappear when you harvest them)
Map Marker Overhaul (allows better markers on the world map)
MD Faster Horse Turning
MD Saddlebags (adds an inventory of about 500 Enc value to your purchased horse)
Key chain (all keys store under a single "keychain" inventory sub-item that you open by clicking)
Spell Delete and Item Remove (allows you to delete stuff that otherwise could not be deleted from your lists)
Reneer's Guard Overhaul (no psychic guards, allows MUCH more diverse and immersive guard experience)
Setsuna Dummy Training (can use those practice stations that NPCs are always beating on to train up skills)
One last one that I swear by; if you would like the added immersion of your character having basic needs (sleep, hunger, thirst) in a way that works well, and is not too obstrusive (I've tried other ones and kept coming back to this one
Tyler's Hungry,Thirsty, Sleepy, Tired
Overhauls that make it a New Game
Oscuro's Oblivion Overhaul Mod
Martigen's Monster Mod
ADDIT: @Phoenix1213: Hey thanks for that TOQL link! Great stuff
I think I'll start with Brew House!