I've recently borrowed Oblivion from a friend, I dl the expansion packs. I've already created a Kajhiit Nightblade, and an Orc Battlemage. But I want to roleplay, And I would like tips to do so.

So far:

Play on +100
Sleep nightly
Eat every 6-8 hours.
Enjoy time at the local tavern.
Sweet talk the lasses.
Flee from nasty looking creatures.

What else should I do?

Do not use Fast Travel, Only carry loot that you can carry without using a cheat, Alteration is a legitimate means of carrying more, but your character should be able to maintain a spell from the dungeon to the vendor. If you are on a PC there are mods that really enforce the rules you have chosen to follow.

Tip #1 for roleplaying:

Imagination.

Only pick up loot that your character would actually pick up. I play a Mage so she only picks up scrolls, potions, herbs and books. A fair amount of imagination is going to be needed aswell. I would also suggest having an idea of what your character did before they were locked up in jail along with what they are going to do in the future.

Try pearl collecting...

Pearl dive around Nibben bay and make sure you dont get eaten

Sometimes it helps to RP a character if you write out a description of them which includes things like where they are from, what are there likes/dislikes, ambitions, maybe a little about their personality. The great part about this is that it doesn't have to be really detailed and it gives you a basis for how to act in the game with the character. Also nothing is set in stone either, things change and sometimes certain events in the lifetime of the character will mold them into a different person than they had originally started out to be.

The rules that you have set for yourself are pretty good, I actually use most of them myself, sometimes it may be hard to stick to them though I know that there has been a few times that I have thought about breaking the rules and sometimes I give in. At that point I usually reload from a previous point after a couple of minutes because I felt like I cheated myself. Anyways, like Sabarel had said, I also only pick up things that my character would use or take off of a dead enemy. Usually I don't carry more than a few potions at a time, but I will carry a mortar and pestle with a few ingredients for important potions. My current character is a mage and he doesn't loot anything unless he knows that he can use it, either as a replacement for something he is carrying (in which case he usually drops the replaced item unless its worth a lot of coin) or some sort of magical trinket that he knows will fetch a lot of coin at the shop. The good thing about playing this way is that you don't gain coin really fast which slows down a lot of things like buying a house or a horse and even spells and skill upgrades. Overall it makes the game last longer and will make those times when you can finally afford that expensive item/spell/house really mean something because of the effort you went through to save that coin.

One other thing that I haven't done yet that I am going to try and do this time is write a story as I play the game about my character and his travels. This is an entirely new thing for me and I'm not sure how it's going to turn out but hopefully I will stick with it. If I do I will post it on here for people to read when it is done.

As in difficulty? Why on Nirn would you do that? That just means 15 minute fights where you lose half your health from one hit. I'd say keep it about 1/4 of the way to the right or so, maybe half. Challenging but not ridiculous and tedious.

Some things I've done in the past, depending on your character type:
If you wear clothing and not armor, wash them. I had a beggar character who would drop her clothes from her inventory and use the "Z" (or whatever it is on the consoles, if you're using that) to pick them up and dip them in to the water at the IC Waterfront.
If you wear a lot of armor, play out the repairing of it. Drop it from your inventory, drop a repair hammer, maybe calipers if you got shot with arrows, then hit your armor with the hammer.

Also, walk around a lot. Don't run everywhere.

If you're on the PC, I'd recommend the mods Actors in Emotions, Actors in Charge, Actors in Madness (if you have SI). A ton of animations so you can see yourself eating, drinking, sleeping, etc.

To add to Velorien's suggestions, you could also play out certain things like sitting silently in a dark corner of a bustling inn, sipping ale and taking in your surroundings (if you know LotR - think of Aragorn as he awaits the arrival of the hobbits, in the Prancing Pony inn, in Bree). Go on walks through the Imperial City or one of the larger settlements after nightfall. Or some small things like replacing your characters armor he/she wears out in the wilderness, for a clothing such as a robe and hood when you enter a settlement, but perhaps keep a small weapon equipped just in case you come across any unfriendly types.

Try keeping it simple to start off with and then progress from there. A lot depends on your character but also on what you find interesting, because there's no point in roleplaying if you're not having fun.

This is the biggest one of all! If at any time you feel like there are some things you are doing that make the game not fun then its time to adjust.

The man has been made...

Auric, a young Breton (Custom)Spellblade. He is already level 10, evoker of the mages guild, journeyman of the fighters guild, Grand Champion of the Arena and an expert in conjuration/illusion. I made him last night. Lol. He was a mercenary pre-imprisonment. And got locked up after having a squabble with the local guard. He has a very chaotic neutral outlook. Doing what he needs to do just to further himself in the world. He dresses fashionably when he is in town for any amount of time, eats when he can. Sleeps regularly. Stays up some nights practicing magic. (Hence the reason for the high skill levels) I tried not to fast travel, but it got the better of me, and the further I go along with him, the less satisfied I am. Im debating on putting him aside, and making a new character. Prehaps a Necromancer. Or a street smart rogue from the streets of the Imperial city. Or a Lunatic Nord with a sword as big as he is, who is prone to bouts of homicide. I just cant make up my mind.

Yow... level 10 in less than a day? I'd be dissatisfied too. I'd be shooting to get to level 10 in about 100 hours. Or more. If the game goes by too fast, there's not even any chance to roleplay.

I have absolutely no right to tell you that you're roleplaying wrong, because you're not. It's your decision and all that.

However, in my experience, I find that you need to take the game slower to roleplay (at least in the way that I roleplay). My main roleplay character, Helena Aurelie, for example, levels at the very fastest once for every ten hours of gameplay. But it's usually quite a bit longer than that.

Roleplaying isn't all about going and killing things in a way that fits your character, though that can be an element. For me, roleplaying is about my characters taking on a personality and living a life. For that reason, on days that I want to go out dungeon crawling, I might be resigned to sitting with Helena on the Anvil docks, dipping our feet in the water, whilst sharing a bottle of Tamika's and strawberries.

I agree with gpstr and Count Lauriel and RP in a style that is similar to theirs. My character is simply a wood elf from Bravil trying to live her life in a beautiful and dangerous land. She does not have a script or a destiny and she dances along her own path. I simply travel with her and help with a few mundane button pushing chores, ocassionally offering advice. Ocassionally she listens.

She took 400 hours to achieve level 20 and, by design, at 600 hours now she remains permanently at level 20. So that is about 20 hours of play for each level.

She is an Apprentice in the guild of mages and has graduated from the Arcane University. She hopes someday, to help the brave soldiers that are standing against an Oblvion Gate at Kvatch. She is horse crazy and considers her black mare among her best friends.

She has no gameplay restrictions or rules, but experiences life in Tamriel intensely enough that eating, sleeping, bathing, changing clothes and all that other mundane stuff comes naturally for her with no urging from me.

Like any long term relationship, there is an aspect of magic as well as tons of respect, careful listening, unconditional acceptance and commitment. I've found all that takes time and focusing on the character's needs and aspirations, not quests or accomplishments.

Your mileage may vary, but I find this style of RP very rewarding.

I went too fast with Auric. Im going to make a new character. A street punk Breton with desires of granduer, A dark secret and an odd taste in fashion.

I tend to create a lot of characters, so I don't think restarting is a bad thing. But, having said that, my current character has completed only a few minor quests (she has a fame of 3), but has killed 300+ creatures and 70+ people. She has discovered over 100 locations. This in about 28 hours of game time.

She is at level 8, but that's only because she majors in Alchemy, which she has already raised to Expert level (she's an Alchemist, and has made 383 potions.) Without the quick advancement from the Alchemy, her level would be lower.

This is her job; she wanders the land, mapping landmarks, collecting ingredients, and making potions to sell.

This is the key to roleplaying for me. The character has a job to do, and does it. There may be opportunities along the way, and my character may get caught up in one of the major quest lines, but there is no way that a real person would go around joining every guild, fighting in the arena, saving the Empire, and diving down dungeons after rare artifacts that he/she would have no reason to even know about. Not all at once, anyway. And if a real person wouldn't do that, then a believable character wouldn't either.

I have to believe in a character to want to play that character for very long.

That inspires me to (re)post a treasured link - to one of the most entertaining bits of roleplaying I've ever seen in the game - Nondrick P. Cair'ktir's non adventures http://livinginoblivion.wordpress.com/2007/02/28/to-sum-it-up/.

Still makes me laugh....

Well, maybe not quite that kind of job... My alchemist lives on the road, but she has been known to take shelter from the weather in a cave or ayleid ruin, and to clean out the vermin while she's there. And she has no problem using the fruits of her alchemy on the roadside bandits and beasties she encounters along the way. She's also a svcker for a hard-luck story, which has led her on a couple of rather strange and circuitous errands... And she keeps finding these strange statues in the ayleid ruins, and they must be worth something to somebody...

The point is that there is no urge to rush into the big quest lines.

I have roleplayed for years in oblivion and have pretty much got it down to a fine art...

the #1 most important thing for immersion I find is to only carry what you would realistically be able to carry.

that means not having 10 swords in your inventory.. not having 50 healing potions... 70 arrows max... 1 sword, 1 dagger and a bow.

the rest of my invent is for food..

if you want to loot... loot gold/silver nuggest and jewelry.. things you could fit inside your pocket.

other things to immerse are..

dont use local map in caves, memorise the passageways... if you get lost, you get lost.

turn the brightness down on your tv so you NEED a torch in caves.

dont swim in water... walk around. But If I come across a small rowboat I swim, and imagine I am using it.

recreation!... after a hard day adventuring go for a drink! watch an arena match or the rooftop fight club in dementia... read a book..

If im out in the wild at night.. I find a fort and sleep on the highest battlements.

dont randomly storm dungeons you have no business doing... A iron dagger wielding khajiit thief has no business entering ayleid ruins.

turn the music OFF. Much better playing with just natural sounds.

if your on a horse.. stop by a lake or river and let it drink for a while, feed it food.

I didn't even know it was called roleplaying...I just consider it having fun in the game

my character is a Breton with the (custom) class of a Shade. the story is that he doesn't remember his past life, he thinks it's possible he either never had one (he made himself) or he is the combo of different spirits. the prisoner was trying to summon a spirit to help him break free and he kind of came into consciousness (he just remembers "being" for a while but that was when he woke up) and he possesed the prisoner then meditated him out of existence...when he saw the dark elf sitting in the cell across from his.

he is a mage. he carries a dagger when in the cities and a staff when roaming on nightshade. he is always in his liars wear (the clothes you got in whodunit)

other than that being a vampire is a really awesome thing to incorporate into your roleplaying. I pretend my guy spent 40 years as a vampire and when I took the cure it was a big deal for him. he was a cyrodiilic vamp through and through and he retains his manners and charm....but he's also a [censored] murderer and a thief when no one lives to tell anyone about it

...and his names Kallus
Raan is my skyrim [censored]

Szykul is a skooma addicted, vampire-hunter veteran, and a kajiit. He was welcomed into the Dark Brotherhood after murdering one of the Orum Gang for free skooma. He currently resides in Bravil, living with the rest of the junkies and drug-addicts.