What Psymon mentioned would be a more useful option if the joystick controls on a PC actually work in Oblivion. I've no way to know since I haven't used a joystick on a computer since my Commodore 64 days.
http://www.gamesas.com/index.php?/topic/1123635-fallout-3-coop-multiplayer-partially-working/ is what I was referring to. About a year ago there was a whole slew of new threads with claims to be co-op adding mods. Each was found to be false.
They were not well received due to again another reference to adding co-op play. Then that created http://i35.tinypic.com/2pz04xs.jpg because us nay-sayers (of which I am apparently one) called out saying no that is not co-op as it is understood today because it is just a companion controlled with a joystick.
A chorus of people then proclaimed that nay saying any mod is wrong and the act of a terrible person.
The point was never to dump on the idea, but the presentation of the idea. To call a mod co-op then find that it is just another set of controls for another actor on screen is not exciting, but instead it is a let down and false. Then making reference to street fighter style co-op as a technicality is just making excuses. Name one RPG third person game that has that kind of co-op (shared same screen - shared keyboard) made for computer and I will retract everything I'm saying. I can't think of one - so when people claim a mod is co-op of course people are going to think of games that are co-op by today's standards. Even the term couch co-op means just offline - not shared screen. So what could be seen as a cool new companion control mod is instead seen as false advertising.
I'm not writing this to disparage anyone - just give feedback about how it is being presented and seen by a section of the audience here.
One of my favorite mods uses this scheme - Side's Sailing Ships - with it you control the movement of the ship with the I,J,K,L keys and the character with the normal W,A,S,D keys.