Unfortunately that trick didn't work so guess I need to do the total reinstall. Thanks for trying to help.
the more in-depth method to work around UAC on Vista is:
1) right-click on the oblivion folder
2) go to properties
3) click the security tab
4) then click the Edit button
5) find your user name
6) and check "allow" on the full control opinion, save the changes.
i use vista and this solved my mod install problems (along with the solution jasmer mentions). fyi if u reinstall oblivion the settings revert back to default. so you have to redo the UAC alterations.