Not sure what y'all are talking about then; there is literally no way to mess up your OS from program files and people now-a-days have even the slightest bit of common sense and don't delete or change stuff at random without making a backup first (at least I would hope). But whatever.

-Windows 7 Ultimate 64 bit.
-Oblivion GOTY edition on disk installed to default directory
- no special changes in default Win7 beahvior, or compatibility changes, just standard, and it runs fine, though oblivion crashes after exiting (this well known issue just occured after several mods had been installed)
- most mods are installed as omod files generated by obmm, the easy ones (single esp's)are just copied into the Data folder. (I do highly recommended to use omods! everything else will mess up your oblivion installation after a while)

- Mod list:

Active Mod Files:00  Oblivion.esm01  You Are Here.esm02  All Natural Base.esm  [Version 0.9.8]03  Oscuro's_Oblivion_Overhaul.esm  [Version 1.34]04  Mart's Monster Mod.esm  [Version 3.7b3p3]05  Mart's Monster Mod for OOO.esm  [Version 0.9.9MB3]06  Better Cities Resources.esm07  bookplacing.esm  [Version 1]08  AFC v2 Core.esm09  Lattamerv3.esm0A  HorseCombatMaster.esm0B  HrmnsOblivionScriptOptimizationv1.0.esp0C  Unofficial Oblivion Patch.esp  [Version 3.2.4]0D  UOP Vampire Aging & Face Fix.esp  [Version 1.0.0]0E  Oblivion Citadel Door Fix.esp0F  DLCShiveringIsles.esp10  Unofficial Shivering Isles Patch.esp  [Version 1.4.0]11  Better Cities .esp12  Natural_Habitat_by_Max_Tael.esp13  All Natural - Real Lights.esp  [Version 0.9.9]14  All Natural.esp  [Version 0.9.8]15  All Natural - SI.esp  [Version 0.9.8]16  All Natural - EW + NW + AWS.esp  [Version 0.9.6]17  Enhanced Water v2.0 HD.esp18  Enhanced Water v2.0 HD - SI Addon.esp  [Version 0.1]19  WindowLightingSystem.esp1A  AmbientDungeons.esp  [Version 1.3]1B  AFC v2 Damage Text.esp1C  AFC v2 Locational Damage.esp1D  Book Jackets Oblivion - BP.esp1E  BookTrackerOBSE.esp1F  BrighterTorches_v1.2.esp20  Living Economy.esp21  Living Economy - Items.esp22  Cutthroat Merchants.esp23  DLCVileLair.esp24  DLCVileLair - Unofficial Patch.esp  [Version 1.0.5]25  StockClothingArmor-forExnems.esp26  Oscuro's_Oblivion_Overhaul.esp  [Version 1.34]27  OOO-Water_Weeds.esp  [Version 1.33]28  Mart's Monster Mod for OOO.esp  [Version 0.9.9MB3]29  Mart's Monster Mod - Shivering Isles.esp  [Version 3.7b3p3]2A  Mart's Monster Mod - Additional Enemy NPC Vars.esp  [Version 3.7b3p3]2B  Mart's Monster Mod - Gems & Gem Dust.esp  [Version 3.7b3p3]2C  Mart's Monster Mod - Hunting & Crafting.esp  [Version 3.7b3p3]2D  Mart's Monster Mod - Looting NPCs & Creatures.esp  [Version 3.7b3p3]2E  Mart's Monster Mod - Less Reavers.esp  [Version 3.7b3p3]2F  Mart's Monster Mod for OOO - LessReaversInGates.esp  [Version 0.9.9MB3]30  Mart's Monster Mod - Safer Roads.esp  [Version 3.7b3p3]31  Mart's Monster Mod - No Blood.esp  [Version 3.7b3p3]32  Mart's Monster Mod - No Bone Loot.esp  [Version 3.7b3p3]33  Mart's Monster Mod - No Undead Rise.esp  [Version 3.7b3p3]34  Mart's Monster Mod - Dungeons of MMM.esp  [Version 3.7b3p3]35  Mart's Monster Mod - More Wilderness Life.esp  [Version 3.7b3p3]36  Mart's Monster Mod - More Passive Wildlife.esp  [Version 3.7b3p3]37  Mart's Monster Mod - City Defences.esp  [Version 3.7b3p3]38  Mart's Monster Mod - Extra Wounding.esp  [Version 3.7b3p3]39  Mart's Monster Mod - Friendlier Factions OOO.esp  [Version 3.7b3p3]3A  Mart's Monster Mod - Farm Animals.esp  [Version 3.7b3p3]3B  Mart's Monster Mod - Diverse WaterLife.esp  [Version 3.7b3p3f]3C  Mart's Monster Mod - Slof Horses Complete.esp  [Version 3.7b3p3]3D  Mart's Monster Mod - Diverse Runeskulls Loot G&GD.esp  [Version 3.7b3p3]3E  OOOLivingEconomyWornRebalance.esp3F  OOO-WaterFish.esp  [Version 1.34]40  JolardHome.esp41  VaultsofCyrodiilBC.esp42  DLCBattlehornCastle.esp43  DLCBattlehornCastle - Unofficial Patch.esp  [Version 1.0.4]44  DLCfrostcrag.esp45  DLCFrostcrag - Unofficial Patch.esp  [Version 1.0.4]46  Knights.esp47  Knights - Unofficial Patch.esp  [Version 1.0.9]48  Mart's Monster Mod for OOO - Knights .esp  [Version 0.9.9MB3]49  Blood&Mud.esp4A  xuldarkforest.esp  [Version 1.0.3]4B  xulStendarrValley.esp  [Version 1.2.1]4C  xulTheHeath.esp4D  MMMMWL-TheHeath patch.esp4E  XulEntiusGorge.esp4F  xulFallenleafEverglade.esp  [Version 1.3.1]50  xulColovianHighlands_EV.esp  [Version 1.2.1]51  xulChorrolHinterland.esp  [Version 1.2.2]52  xulBeachesOfCyrodiilLostCoast.esp  [Version 1.6.3]53  xulBravilBarrowfields.esp  [Version 1.3.2]54  xulLushWoodlands.esp  [Version 1.3]55  xulAncientYews.esp  [Version 1.4.2]56  xulAncientRedwoods.esp  [Version 1.6]57  xulCloudtopMountains.esp  [Version 1.0.3]58  xulArriusCreek.esp  [Version 1.1.3]59  xulPatch_AY_AC.esp  [Version 1.1]5A  xulRollingHills_EV.esp  [Version 1.3.2]5B  MMMMWL-RollingHills patch.esp5C  xulPantherRiver.esp5D  xulRiverEthe.esp  [Version 1.0.2]5E  xulBrenaRiverRavine.esp  [Version 1.0.2]5F  xulImperialIsle.esp  [Version 1.6.3]60  xulBlackwoodForest.esp61  xulCheydinhalFalls.esp  [Version 1.0.1]62  xulAspenWood.esp  [Version 1.0.1]63  Natural_Vegetation_by_Max_Tael.esp64  Harvest [Flora].esp  [Version 3.0.0]65  Harvest [Flora] - Shivering Isles.esp  [Version 3.0.0]66  Harvest [Flora] - DLCVileLair.esp  [Version 3.0.0]67  Harvest [Flora] - DLCFrostcrag.esp  [Version 3.0.0]68  AC's realistic priced clutter.esp69  P1DkeyChain.esp  [Version 5.00]6A  More Realistic Encumbrance with Fatigue.esp6B  ReducedBackwardsRunningSpeed.esp6C  RealisticForceMedium.esp6D  RealisticMagicForceLow.esp6E  Jump_Adjustment-2211.esp6F  BoneGrind.esp70  RshAlchemy.esp71  RshAlchemyRecipes.esp72  DD_ProximitySneakPenalty.esp73  RenGuardOverhaul.esp74  RenGuardOverhaulShiveringIsles.esp75  Deadly Reflex 5 - Timed block and 150% damage.esp76  DeadlyReflex 5 - Combat Moves.esp77  Duke Patricks - Near Miss Magic And Arrows Alert The Target.esp78  Duke Patricks - Fresh Kills Now Alert The NPCs.esp79  Mart's Monster Mod - Resized Races.esp  [Version 3.7b3p3]7A  Nec Mystic High Elf-Remake.esp  [Version 1.0]7B  Nec - Extra Mystic Elf Face.esp7C  Nec Mystic Dark Elf-Remake.esp  [Version 1.0]7D  CuteElf11.esp  [Version 1.2]7E  Tabaxi Race 2.0.esp  [Version 2.0]7F  Ren_Soya_KD's.esp80  _Ren_BeautyPack_full + Soya's hair.esp81  KT_CustomRaceFix.esp82  Better Cities - Full City Defences.esp83  Better Cities Full - B&M Edition.esp84  Better Cities - Unique Landscape Barrowfields.esp85  Better Cities - Unique Landscape Chorrol Hinterland.esp86  Better Cities - Unique Landscape Cheydinhal Falls.esp87  Better Cities - No LEYAWIIN Flooding.esp88  Better Cities Full - B&M Edition FPS Patch.esp89  Better Imperial City.esp8A  Better Imperial City FPS Patch.esp8B  QTdof.esp8C  Real Lava 1.3.esp**  All Natural - Indoor Weather Filter For Mods.esp  [Version 0.9.9]8D  Bashed Patch, 0.esp8E  Streamline 3.1.esp8F  Nec-Mystic Dark ElF.esp90  Gems.esp91  OOO-Better_Priced_Clutter.esp92  Oblivifall - Ambiant Dungeon SFX.esp  [Version 1.0]

Installing with Wrye Bash won't mess up your installation.

gothemasticator

Running window7 64 bit and windows xp 64bit on a seperate partition setup for dual boot. I use both to test stability for windows 7 vs xp. Xp uses 600mb less ram which has it's benefits. Xp 64 bit also gets 20 fps more than win7 64bit. This was tested with the rig in my sig. Not sure if ati card share the same result. I always install oblivion to seperate harddrive and in a non-standard location. Currently testing a ctd issue on win7 to see if the same ctd exists in xp. Will update. Oh, and I haven't had issues with uac. Probably because ob is installed in non standard location

1. Windows 7 Home Premium 32-bit
2. Oblivion GOTY DVDs
3. I installed in the Program Files directory out of habit although I read repeatedly not to do so.
4. No problems running Oblivion or installing/running mods; I had to click through some Admin prompts, I think, but otherwise no trouble.

I basically skipped over Vista, so I can't speak from experience about that OS. Concerning Windows 7, I agree with the original poster and think the concern about UAC is way overblown.

I run Windows 7 Pro 64 bit
Installed in default directory c:\program files (x86)
Wrye bash 277 (ran earlier versions without problem)
BOSS runs without me installing the C runtime libraries (they may be in Win 7 by default?)
Oblivion GOTY
FCOM plus a bunch of mods (still tweaking)

Do not use UAC, I know what I am doing

Performance better than XP on same hardware, possibly due to the better direct-x?

I am using the 3G enabled version of oblivion.exe

1. Do you run Windows 7? And which version?

Just installed Ultimate 32bit, haven't had the chance to try OB yet. Used the 7100 RC for months before this.

2. Steam or disc Oblivion?

Disc

3. Default install directory or not? If not, because of experience or because of Vista advice?

Separate Partition, because I like to keep my often-changing Games folder separate from system files. Been putting games separately since I had Win98, though ^^

4. Any modding problems in default directory with 7? Any modding problems in alternate directory?

Just regular conflicts, nothing that can be traced to Win7. I do turn off UAC first chance I get, though.

Correct. They are now installed right along with the operating system.

gothemasticator