I have always loved http://www.nexusmods.com/oblivion/mods/32432/?. It's a great overhaul of the Arcane University that is fully compatible with Better Cities and Midas Magic. It gives the university a nice face lift and adds a teleportation network with all of the mages guild halls in Cyrodiil.
Its a very well done mod, but it is slightly older and has not been updated since 2010. As a result, there are conflicts with both the Unofficial Oblivion Patch and Weather - All Natural/Real Lights that were not corrected by the original Universitas Author Lambton Worm. The conflicts are not that significant but are somewhat annoying, and include things like floating lights, rain falling through the roof into interior spaces, misplaced wall sections and certain NPCs getting stuck behind the doors to the arcane university lobby.
I have released a pair of patches that resolves all of these conflicts and fixes a minor bug in Universitas Arcanarum. The patches are available http://www.nexusmods.com/oblivion/mods/47533/?. Please report any issues in the patches so I can fix them. Thanks.