I think this has happened to a lot of people. I have an old disc, just Oblivion so I have to do all my updates and patches online. I installed Oblivion, just the raw install, no updates, and I downloaded the Shivering Isles update, but when I tried to install it, it got a message saying

"Old file not found. However, a file of the same name was found. No updates done since file contents do not match."

Refuses to update. BUT when I did the v1.2.0416 update without Shivering Isles, it updated just fine. Some of the mods I want to use require Shivering Isles. Does anyone know why it won't install?

I'm confused... do you have Shivering Isles installed or not? The GOTY edition comes with Shivering Isles and is already completely patched. If you have just the vanilla oblivion disc without Shivering Isles then obviously the Shivering Isles update will not work, as you don't have Shivering Isles.