I won't comment on the forced dialog thing, other than to say .
The quest structure is the issue, and it's a problem that I think is far too common in Oblivion.
If you meet with Glarthir, he asks you to spy on his neighbor. If you refuse, he goes berserk and tries to kill her, and gets himself killed. If you agree to help him, your only option is to spy on her (or not) and report back to him. The process then basically repeats, with new people to spy on. You can talk to guards, but there is no benefit to doing so until Glarthir actually proposes murder. From that point, somebody is definitely going to die.
The quest lacks an obvious other possibility. Is there no one in the whole town who is willing to help the poor elf? This whole drama is playing out in back of the chapel; is there no priest or healer who could be called upon to help this obviously confused and ailing person? Where is the option for the caring Healer-type character or the noble knight? Remember, this is a forced quest.
This is only one of many quests that are, in my opinion, marred by a lack of PC choice. The DB quest line starts with the Visit from
The obvious questions are these:
Do you agree with the above criticism?
Which Oblivion quests, in your opinion, are well constructed?
What do you, as a player, do when you find your options limited?