This is something that I've hated doing in Morrowind, and Oblivion as well, but as I get further and further, to me it becomes more and more necessary to Wait for an hour to get my health bar full again.

I am Atronach birthsign, so I can't just spam a heal spell, and I typically don't have a lot of health potions on me either since I don't do Alchemy. Lots of times, I'd typically just be waiting around anyways for some spell effect to end before I proceed. So instead of sitting around for 10 minutes at a Blood Fountain or something, waiting for it to constantly refresh, I just wait an hour and bam! Full health.

Is this considered a cheap tactic, or just making legitimate use of an included game mechanic?

I look at every question like this from a roleplaying perspective. "Is there an anologue for this action in real life?" I ask myself when I'm uncertain. For instance some players consider using training is cheap but, from a roleplaying angle, I don't. We pay trainers in real life, why wouldn't we pay trainers in our alternate life?

Regarding waiting, my feeling is that it is not cheap. Let's say you're exhausted from walking for hours. What do you do in real life? You rest. Now, manipulating Nirn's energies has to be be mentally exhausting, as mentally exhausting as swinging an axe is physically exhausting. So, from a roleplaying perspective, I think there is ample justification for waiting whenever your mage feels he or she is too mentally exhausted to continue.

i dont do it to often, if im in the middle of say a dungeon and i run out of magicka or low on health ill use potions for the most part but if i get to the end of the dungeon and there arnt any more creeps then i'll just rest. i think of it like now that i finished that long dungeon, weary from fighting, ill just take a nap and let myself heal naturally since there isnt anyone around to interrupt my nap.

Some may consider it cheap or an "exploit", but it's an actual mechanic of the game. Really though as others have said before, it's a single player game, you play how you want. Nevermind what other people think of it.

I use the rest button to see if there are enemies nearby and avoid trouble. Some may consider that cheap or an exploit, but I don't care. 'Tis how I play.

I personally think it's cheap using it on my stealthy archer, I don't need to do it, I barely ever take much damage as I'm always hiding in the shadows and if I do I spam a heal spell, but that said, if I were a Mage atronach who doesn't make potions then I would most likely use it too.

If I were hurt and tired, I would certainly sit down and rest a while before going into another exhausting battle.

I do have a roleplaying-related question about your character, though... Is there a reason why you don't do Alchemy? It just seems that it would be a logical thing for a person born under the Atronach sign to do; the person would have lived his whole life with the peculiar demands of that birth sign... Not a criticism, it just rouses my curiosity.

I have always considered it cheap and avoid it where possible.

Dungeon diving grants you plenty of healing. Most chests you open have some form of healing/magicka potion inside, so I find it strange to see anybody without healing potions.

Pseron Wyrd makes some good points though, so I guess it would be okay to use it from a role play standpoint.

Absolutely

Like many people here, im big on backstory for my characters, and playing as my character would exist in the world. In fact, for most RPG's I play, my characters are based on characters I've developed in my own fiction, or my characters become characters that I use in my own fiction. My Oblivion character is no different. My Oblivion character started off in my head as a rather generic fantasy villain. I wanted more of a story for him, but I had a hard time coming up with one. When Warhammer: Age of Reckoning was coming out, I developed a backstory for the character I was gonna play in that game. That character served as the basis for my fantasy villain, and later, became my Oblivion character.

Basically, the roleplay is this. Khulain is a great warrior (combat specialization, strength and endurance are favored attributes, and blade, block, and heavy armor are 3 of my skills), but he is touched by an arcane aura. In Elder Scrolls terms, his birthsign makes him more in tune with Arcane energies than most people of his race (Redguard). He began to dabble in arcane arts, and he liked it. So much that it began to consume him. He became obsessed with needing more power, but he always hit a wall (consequence of the birthsign). However, he in time learned about Welkynd Stones and the energy they possessed.

So basically, my roleplay is that I scour Aylied Ruins to gather Welkynd Stones to fuel my characters arcane power lust. For the main quest, that decision was because 1.) as a player, I wanted to do it (in my 5 years playing Oblivion, I've never completed the main quest. The times I had attempted it before, I ended up having computer issues and lost my characters. Now without a PC capable of running Oblivion, im just going through it on X-Box 360) and 2.) as a character, I wrote Khulain as a once loyal soldier of the Emperor who, in his heart, wants to fight to protect his country, but is also consumed by this lust for power as well. Also, the Sigil Stones found in Oblivion gates aren't too shabby a source of power for him Physically, I made him old and gray to show his years of experience, but he's still a fighter to be feared. Its not exactly how he's written in my story, but it works for Oblivion purposes.

As far as Alchemy goes, its certainly a great skill, but running around collecting ingredients isn't my favorite thing to do in the game, so I cut Alchemy out of the characters I build.

The skills I picked came from later Morrowind characters id create as secondary characters. My main character was a standard thief, with a little bit of magical skill in Illusion, and Conjuration, because summoning stuff is my favorite skill in fantasy RPG's. My later characters, I learned to love the Enchant skill, and I eventually came up with my standard Elder Scrolls dark mage. Conjuration for summoning evil spirits, Mysticism for stealing the souls of living beings, and Enchant to use those souls to give myself more power, via enchanted weapons. Enchant isn't in Oblivion as a skill, but I wanted to build the standard archetype that I had made. My playstyle in RPG's had shifted from a light weight DPS'er to a brutish tank (thanks again to my time in WAR) so I wanted to go heavy armor with big, heavy claymores. So my build ended up being Blade, Block, Heavy Armor, Conjuration, Mysticism, Alteration, and Destruction. The basis of this character will probably also be the basis of my Skyrim character, with certain tweaks depending on gameplay mechanics (for example, I plan to dual wield 1 handed long swords with my Skyrim character).