Problem: Whenever I am near creatures/NPC's in game there is judder/stutter. The framerate drops then jumps up, then drops, as if for a few frames it is fine then it drops, then its fine.

Windows 7, Nvidia 560 Ti 1GB, 4GB Ram.

I have rolled back the driver and moved back to an old driver from mid 2012. The game worked fine up to a few months ago.

I have unticked every mod, so running ordinary oblivion with nothing extra attached, it still happens.

Any ideas?

CPU?

Perhaps some software you installed since the last time, Anti virus are famous for this, is now running in the back ground and interfering with the game?

Try a strict clean boot

http://support.microsoft.com/kb/331796

I have also heard of weird situations where if the game is left idle for a number of months that a reinstall is needed to make it work smoothly again. Not sure of the valididty of this, but I have seen enough posts were people claimed it would help to to ignore this.

Now, you can back up your data files folder so that mods are easy to reinstall. Just put it on the new install. Assuming it is not a mod that is really causing this.

Also, unchecking your mods and loading a save that had those mods on it is not a good test, you need to do this with a character that has no mods on it if your testing an unmodded game. I would be best at some point to make a character on an game that has no mods, even buff them up with the console to survive. Then, use that save to test mod mixes and such and not your main characters.

That is usually a problem with the sound system drivers -- ie. the footstep sounds playing cause the system to lag - try installing the Quiet feet mod ( Linkie - http://oblivion.nexusmods.com/mods/1999 ) and see if it helps From the mod description :