Does it work that way for every skill?
Skills are pretty simple. Quote UESP wiki:
Some magical effects can increase your skill above 100, but in general increases above 100 have no real effect. The only exceptions are Acrobatics and Athletics, which will continue to increase your character's jump height and run speed, respectively, up to a maximum value of 255.
Attributes are a little more complex. Another UESP quote:
The current value of an attribute can be boosted past 100, and many, but not all, benefits of the attribute continue to increase for values greater than 100 (see Magical Effects on Attributes). Most aspects of game play are based upon the current value of the attribute.
For more info, check the link and follow the sublinks to Skills, and Attributes. http://www.uesp.net/wiki/Oblivion:Oblivion