Thanks.
Here are their suggestions:
Crack open that initialization file (found in your My Documents/My Games/Oblivion directory) and make a few edits based on the following settings. The settings won't affect your image quality, but they do help with in-game stuttering. You can double the default values if you have 1GB of RAM, and then double them again if you have 2GB of RAM. The first two values (uInteriorCell Buffer and uExterior Cell Buffer) determine how much memory Oblivion dedicates to buffering these areas. You can leave these values at default if you wish, but if you have the RAM to spare, crank it up to at least the 1GB level. iPreload Size Limit determines how much RAM Oblivion gets to play with when it has to load levels.
Default:
uInterior Cell Buffer=3
uExterior Cell Buffer=36
iPreloadSizeLimit=26214400
1GB of RAM:
uInterior Cell Buffer=6
uExterior Cell Buffer=72
iPreloadSizeLimit=52428800
2GB of RAM:
uInterior Cell Buffer=12
uExterior Cell Buffer=144
iPreloadSizeLimit=104857600
If they aren't already set to 1 in your .ini file, change the following settings to 1 for some preloading goodness. These settings allow the game to preload textures and other files related to where you are. Load times might increase a little bit if you do so, but the change should noticeably reduce in-game hitching.
bBackgroundLoadLipFiles=1
bLoadBackgroundFaceGen=1
bBackgroundCellLoads=1
bLoadHelmetsInBackground=1
iBackgroundLoadLoading=1
bBackgroundPathing=1
If you happen to have a dual-core CPU, enable the following settings. They, too, will help with loading and give slight boosts to performance.
Multithreading Tweaks:
bUseThreadedBlood=1
bUseThreadedMorpher=1
bUseThreadedTempEffects=1
bUseThreadedParticleSystem=1
bUseMultiThreadedTrees=1
bUseMultiThreadedFaceGen=1
iNumHavokThreads=5
iThreads=9
iOpenMPLevel=10
Oblivion's water reflections look good, but they're missing a few things. Namely, your character doesn't have a reflection; the trees don't, either, and even nearby rocks miss themselves in the water. Track down the following settings in the .ini file and switch them all to 1 from their default setting of 0. High-end systems won't bat an eye at the performance hit, but you might have to adjust how much candy you want to turn on if you have a weaker system.
bUseWaterReflectionsMisc=1
bUseWaterReflectionsStatics=1
bUseWaterReflectionsTrees=1
bUseWaterReflectionsActors=1
Adjusting iMinGrassSize doesn't improve graphical quality; it merely changes it slightly for better performance. The default setting is 80; higher settings such as 100, 120, and 140 will add more space between each patch of grass and give you a slight boost to performance. Go too high, though, and your landscape will look like a mangy dog. Try different settings to determine a good balance of performance and quality.
iMinGrassSize=80