Would a solid state hard drive dramatically improve Oblivion's performance?

Oblivion meaning modded and vanilla.

A solid state drive would dramatically improve load times all around. So vanilla or modded, your game, saves, misc. data would definitely load faster. Hopefully that is the improvement you're looking for.

Basically all it would do is reduce, or possibly even eliminate, the amount of stuttering you experience as you travel around the game world. Nothing else would really be affected.

Terrific!!! Thanks for the replies.

I run an SSD on my desktop and load times are significantly reduced from a HDD.

Well yes, the stuttering is largely, if not completely, being caused by the game loading textures and meshes from the hard drive. Which is basically the same thing as load times. Loading up a save game though doesn't have much to do with performance. Though I suppose the interior/exterior transition duration would be considered a load time as well.