The only way I've figured out to fix is to uninstall / reinstall Oblivion but it's starting to get on my nerves having to do this everytime this [censored] error happens, I would rather figure out what's causing it so I don't have to worry about it ever again.
Oblivion is up to date and I'm using ATI Radeon HD 5600 series ( it's updated)
I have a couple of mods, obse, and using OBMM
Load Order:
Oblivion.esm
TamrielTravellers.esm
CM Partners.esm
Enhanced Water v2.0 HD.esp
Symphony of Violence.esp
MIS.esp
MIS New Sounds Optional Part.esp
PCSoundKeldorn.esp
Oblivion Collectible Cards.esp
Shield on Back 3.1.esp
Crowded Cities 30.esp
Oblivion Graphics Extender Support.esp
MaleBodyReplacerV4.esp
Hemingweys NPC Capes.esp
tda_Armoury Beta v1_2.esp
trfjEmpireLongsword.esp
RealSwords - Goblin.esp
RealSwords - Orc HI_NPC v1.0.esp
RealSwords - Orc HI v1.0.esp
RealSwords - Redguard HI-NPC.esp
RealSwords - Redguard HI.esp
Creature Diversity.esp
TamrielTravellers.esp
TheForgottenShields.esp
VaultsofCyrodiil.esp
RealisticForceMedium.esp
Let There Be Darkness - Cyrodiil.esp
CM Partners.esp
CM Partners More NPCs.esp
CM Partners Extra NPCs.esp
Hemingweys Capes.esp
The Art of Battle.esp