I've done some searches for this on the CS wiki but I'm not having much luck. I'm looking for a guide or something that will help me get better lighting in my dungeons/houses/castles etc. Lighting really makes the mood, and I've noticed that bad lighting can really drag down an otherwise good interior.

Anyone know of something like that out there? My other option is to copy the lighting/lights from vanilla cells, but I'd rather learn the theories behind good lighting as well if possible.

Looks like I need to work on getting the one I had planned written up then

Consider yourself encouraged, Arthmoor.

There are two main schools of thought on lighting in Oblivion. Lighting can utterly destroy your framerate and make the game no fun. This happens when there are intersecting light radii. Oblivion, unlike Morrowind, cannot handle intersecting light radii well. The makers of the levels in Oblivion did not know or care about the problem with framerate in the presence of intersecting light radii, so they did their lighting with an eye toward making things look good.

Nowadays many modders place their lighting with an eye toward maximum framerate. They don't want to have any light radii intersecting in a large cell, especially if numerous actors and animations are present. This makes it so the cells don't look as good, and things might end up darker, or end up with unnaturally high light levels in the cell to compensate for lack of functioning light source points. But it greatly improves framerate.

So what you build depends on what you want:
(1) Beautiful lighting, and jerky stuttering laggy game.
(2) Ugly utilitarian lighting and great framerate and performance.