What is your favorite overhaul mod, because I am not sure which one I should install.

Martigen's Monster Mod
Oscuro's Oblivion Overhaul
Francesco's Leveled Creatures
Warcry
...

Why, all of them, of course!

FCOM



Edit: if you are looking for a great place to start, or only one, I recommend Oscuro's Oblivion Overhaul.

It is an amazing overhaul, and it is simple enough to install. Although the readme is relatively long, you should read it to see all that OOO does.

OOO. Makes the game more like Morrowind. Francesco supposedly is the closest to a vanilla experience, and what the game should've looked like at release I hear.

I've considered using MMM with OOO, but after seeing screenshots of some of the monsters a few of them appear to be lorebreaking. Besides, OOO has a lot of handplace monsters and such from what i've read, and i'm not sure if MMM would mess that up or not.

FCOM looks neat, but it also looks like it's a bit of work to install, and then i'm a little concerned about stability issues with other mods. It does appear to be the prefered overhaul though in general.

Suggest the thread 'http://www.gamesas.com/topic/820948-scaling-overhaul-comparison' might be of use with your dilemma. It's all about what type of game you want to play, and that thread discussions those differences.

-Dubious-

I have only used OOO so far, and I agree with you about MMM that was one of the reasons why I never installed it.

MMM, due to its modular nature (with 69 esp/esm currently), gives you the options to remove various creatures.
Presently, there are 20 different options to remove/reduce creatures. You are able to tailor your perfect game.
The AI in MMMs creatures is second to none.