In Daggerfall, when you got sent to prison.. say you got 500 days in prison.. you had to wait for a counter to run down until you served your sentence.. wheras in oblivion, doing a hefty jail sentence was simply a matter of sleeping for one hour.
do you want some kind of real time jail sentence? ie daggerfall counter or maybe even doing some hard labour in a mine, shackles round the ankles etc.. of course make it optional.. I think roleplaying a prisoner would be pretty cool, read some books in your cell.. walk around the yard talking to other convicts, eating a meal of gruel 3 times a day.. PRISON RIOTS!