I don't understand how people 'retexture' things. I don't understand how you get the meshes to retexture. If i look through every folder on my pc there is no sign of any vanilla object in oblivion. I want to know where I can get vanilla items to retexture, please help?

Vanilla textures are stored in the Oblivion- textures- compressed.bsa archive in the data folder, to get at them, you would have to unpack the textures from that with something http://cs.elderscrolls.com/constwiki/index.php/BSA_Unpackers

then save your new texture in Oblivion\Data\Textures under the same path as the original had in the archive.