For the most part Steam hasn't been a problem for me. There are workarounds for almost anything that could be a problem, and those are few and far between. The only two big ones I can think of are as follows: If your OS is Vista or Windows7, Steam has to be installed somewhere other than in Program Files, otherwise you run into permission issues when trying to swap out files; Normally, Oblivion is restricted to 1.8GB of memory before it crashes, and with a heavily modded install it WILL reach this cap. There's a Large Address Aware (LAA) patch that is supposed to make it use ~3.5GB. The problem is that Steam detects any changes made to Oblivion.exe and reverts it back to normal. If you don't have more than 2GB of RAM, this second point is moot.
Hmm OK, well I am using Windows 7 and Steam is installed in program files (x86). There are two program files folders, the one with (x86) is where things are normally installed. Where should I move Steam to? Will i also need to have Oblivion installed to this location?
Edit: And if I can't use OBMM, is there a utility that works with steam?