Oblivion is five years old now, but the only "5700" anything that existed five years ago was the horrible Geforce FX 5700, which required a special "Ultra Low" and ultra ugly setting or it wouldn't work, but because nVIDIA lied to Bethesda and convinced them to publish really ridiculously wrong system requirements, they released a patch very soon after the game to fix it so the Geforce 6200, 6600, FX 5700, FX 5800, FX 5900, and FX 5950 could more or less run.
Just ignore the auto configuration and set the quality and resolution to suit the card you actually have.
THe auto configurator doesn't account for newer hardware. Simply manually set for high/very high quality.
If it really was a case of non-recognition, the launcher defaults to "Medium". That was not in fact the case for the HD 5770 at all.