I recently reinstalled Oblivion on my Windows 7 PC, applied the 1.2 patch, then loaded the DLCs. Upon running the game, it wouldn't work. I reinstalled the game, this time running the Shivering Isles patch after installing Oblivion and the DLCs. The game is now playable but it seems to be stuck in a low quality setting. Texture quality is lousy and I am not getting any in-game effects. I am running an AMD 6850 video card, so it can definitely handle the graphics.
On the off chance I had bad drivers, I fired up Starcraft II. It loaded up with high quality graphics running normally.
I am prepared to re-install the game, but if anyone has any idea what could be causing this?
P.S. Does anyone know why the Shivering Isles version of the Oblivion 1.2 executable patch doesn't add the 'visual quality' buttons, like the Oblivion 1.2 patch does?