So i've played oblivion to the end including shivering isles on the xbox 360.

I ended up with a character strong in blade and heavy armour. Pretty much hack and slash by the end.

I wanted to play again with something completely different. I was thinking a thief/assassin.

What is a stealth/ranged character like to play? Most of the enemies seemed to rush me, meaning a bow was put the question after the first shot. I don't want to spend the game kiting round in circles taking cheap shots.

Are stealth characters any good to play or am i better off with magic?

I would go with a combination of magic and stealth. This can be extremely powerful and interesting, and I do suggest using a bow as your main weapon.

I recognize your complaint about having to kite in order to keep using your bow. There are a number of ways to combat this, the most obvious (but most uninteresting) one is to carry a dagger/sword with you for when enemies get close. Below I will give some tips on how to solve this issue in a more fun way. You will notice that most, if not all, solutions rely on magic though.

1. Enchant your bow, and poison your arrow. Combine this with a sneak shot, and you can kill enemies in one shot, or at least weaken them far enough to easily finish them off afterwards.
2. Use effects like paralyze and/or burden to keep enemies from rushing at you. Enchant your bow with it, or poison arrows with the effect.
3. When facing multiple enemies, using a 'command' spell comes to mind. Let them attack eachother, while remaining unseen yourself (with chameleon/invisibility/sneak). Kill off the weakened survivor(s) with your bow.
4. Spells like demoralize and turn undead can be used to keep enemies running to and from you, while you continue shooting them with your bow.
5. Invest in acrobatics and use it to reach spots where enemies can't reach you, allowing you to shoot them from a safe distance. (personally I think this is too situational and a bit of an exploit, so I don't use it if I can avoid it.)

I suggest avoiding destruction spells, as your bow already gives you a means of ranged combat. Most players prefer to have a melee attack as well though, and since you seem to not want to use weapons, you can either avoid melee entirely (but it will result in some kiting) or go with 'on touch' destruction spells.

Since your character will rely heavily on burst damage, invest in agility, and of course intelligence/willpower so you don't run out of magicka. Endurance is always of help, but not particularly needed if you play your character right.

I have an archer, who is also a mage.
She uses the bow, 90% of the time, bow skill is 95, blade is 14 lol.
Sandovale has a lot of good points. Enchanting your own bow, poisoning your shots. Illusion is a great school to be involved with, for the paralysis spell, which I then turn into a custom spell.
An average scenario is:
1. Sneak shot. Enemy-dependent, a particular type of arrow is chosen, and poison may or may not be used.
2. Usually, I remain undetected, as sneak skill is at 100, and can get the second killing shot in there. I can one-hit kill all magic users, as long as I use an ebony arrow or higher quality, with my current bow damage.
3. If detected, I will stand up (as you can do a little more damage with your bow when standing), and will fire shots into the charging enemy, supplemented with target elemental spells, and/or conjured buddies.
4. If they get in my face, I pop a Welkynd Stone or custom restore magicka potion (insanely more powerful than anything the game gives you), and unleash an extremely powerful touch spell, which combines soul trap, paralyze, all elemental damage and weaknesses. Although there is more elemental damage in the spell, the game classifies it as an Illusion spell. This will one-hit kill most chargers.
5. One of two things: pull out dagger, or turn invisible and run, if spell doesn't kill.

Why not do both? I'm level 27, armor rating is zero. Detect Life, enchanted on a ring with a high-end sigil stone, gives me 180 feet of detect life. Detect life stacks mind you, so if wearing the ring, and you cast a 120 feet, I now have a total of Detect Life 300 feet for 60 seconds.
Lately though, I've been playing with no DL and no music, for that added, unexpected, poop your pants moments. I'm jumping out of the chair more.
Just remember, avoid melee situations when possible, two hits from a blade will nearly kill me or the dreaded brown bear if it catches me unawares, and pick and choose your battles. It's a lot of fun..... highly recommended. :turtle:

Thanks guys, that's exactly what I was after.

Both of you mention the advantages at higher levels (with 100 in Sneak etc) but will I find it tough going at lower levels while I try get the skills and spells to make life easier?

Also, should I avoid putting the skills I expect to use such as Sneak, Acrobatics and Marksman into my major skills thus causing me to level up too quick?

Try having 3 skills you use a lot, 3 skills you don't use at all, and 1 skill you use sometimes.

I play a no melee, no armor archer who supports her bowkilling with magic.

Basic tactics for differing situations look like this:
-Normal: Long range poisoned sneak shot.
-Dispersed crowds: Snipe the farthest first and stay in the shadows. Repeat.
-Tight crowds: Mind control spells to get the crowd to thin itself to one. Snipe the survivor.
-Underwater: Block with bow and cast touch damage spells (I like absorb health).
-If cornered: Block with bow and immobilize foe with a spell (command, calm, paralyze…), then open fire with bow.
-If charged: Stop the charge with an illusion spell, then open fire with bow.
-Panic button: Invisibility, slip away and reapproach for the snipe (combining a cheap summon with invisiblity spell makes this both easier and more fun).

Important capabilities (Nothing to do with major skills): Bow, poisons, weakness to poison, drain speed, detect life, a slow and methodical patient playstyle, mind control spells, invisibility, Cobra's Dance (from the Serpent Birthsign Stone), blocking with a bow, touch damage spells.

You asked about lower levels. When cornered, block with your bow and spam that flare spell.

You asked about major skills. Sorry, can't help there. I pick 'em only to control how fast and high my character levels. Nothing to do really with what she uses. I will say that sneak and alchemy can level very quickly and I would never take either as a major.

There are plenty of topics about picking your majors in order to level up efficiently. I personally came to dislike the leveling system more and more as I learned about it, so I installed Oblivion XP to change how you level, meaning I can actually pick the major skills that I WANT, not having to worry about efficient leveling. So I'm afraid I can't really help you out on that subject.

Edit: just realized that you are on x-box. I'll try to help a bit more then. First of all, http://www.uesp.net/wiki/Oblivion:Efficient_Leveling.

Basically, you want +5 on every stat you choose when you level up. That means you need 10 skill increases in skills that govern each attribute. You can only do this if for each attribute, at least one of the 3 skills that use it is a minor skill. Assuming you want to focus on intelligence, willpower and agility, I suggest taking alchemy as a minor (you can level it at will, very controlled, it governs intelligence). For increasing willpower, you probably want both destruction and alteration as minors, and only put restoration as major (since restoration levels relatively slowly and it's important for almost any character). Concerning agility, I'd put only security as a major, since you can control the leveling as well, and you will want to use both sneak and marksman a lot. Because of that, you want those two as minors, so you don't level up too fast.

I'd go like this:

Majors: (among others)
- Restoration
- Security

Minors: (among others)
- Destruction
- Alteration
- Marksman
- Sneak
- Armorer
- Alchemy

The only one I didn't elaborate on is armorer. I choose this as a minor skill because you can level it in a controlled manner as well, any time you want to pick endurance on levelup, make sure to train 5 times that level, get the rest from using skills.

For the rest of your majors, you want to pick skills that you don't feel you HAVE to use a lot, but that you CAN use whenever you want to levelup. You can also pick some random skills that you don't plan on using at all, just to fill up to list of majors.

In the beginning of the game, like you mentioned, you will have a bit of a hard time since your skills are low and you don't possess all the necessary spells yet. Start working on alchemy for potions and poisons to make up for your weaknesses, and buy some spells asap. You could do the dark brotherhood or mages guild questlines to get some armor/clothing that will fortify your skills (either sneak-related or magic-related depending on the faction). Joining the mage guild is also a good way to get a source to cheap spells, and the option to create your own spells later on.

I don't efficient level. I have however, the plan that my character will stop leveling at 30. But guess what? Contrary to popular belief here, I picked the majors I plan to use, use them extensively, and yet still will reach my goal of having one 100 level killing skill, and expert level support schools of magic.
Marksman levels up slowly. I always put it as a major. Even using the bow most of the time, it still levels up slowly. Sneak levels up extremely quickly for me. In fact, it is often the first skill to reach 100. I never put it as a major.
My character's majors:

Marksman
Illusion
Destruction
Restoration (the slowest leveling skill of all)
Speechcraft
Acrobatics
Block

Efficient leveling, with all its calculations and the need to write crap down, is an immersion-breaker for me. Tried it once, never again.
http://www.gamesas.com/index.php?/topic/1161450-i-ruined-my-oblivion-experience/ is a thread that explains the potential pitfalls of power leveling.

Yeah that's more my thinking too. I tried a bit of efficient leveling but the immersion was ruined with the notepad and tracking of raised skills. Instead I just went back to playing the game.

It looks like placing Skills you'll actually use but level up slowly (like restoration) might be the solution. It ensures you aren't gimped at the start but won't over-level.

Your list looks good, I might swap Speechcraft and Block for something else though.

In my opinion the best way to go for a stealth character is to use A bow, sneak, illusion magic, alchemy(for poisons), and a melee. If you play on PC there is a mod that makes arrows more powerful for stealth characters... if not you can either turn down the difficulty and not wear armor or learn to use poisons well. Honestly I think most light armor looks odd on ranged characters, my bowman always used a black cloak and hood.

Poisons are very strong, but aren't multiplied by stealth bonuses. Keeping a melee weapon like dagger or sword(2hander if you wanna be something of a ninja) that has a paralyze or drain speed poison on it... for easier dungeons you can keep a damage health on it and use it as last resort for anything that doesn't die from arrows. For harder dungeons I'd put a paralyze on it, and use damage health on your arrows.

You can also usually use invisibility spells like vanishes, sometimes you are able to get away and "resneak" while the guy you shot is dying from your poison.