My first test was to update Oblivion - Textures - Compressed.bsa with Corpec's vibrant textures. So I created a vibrant folder, copied the necessary files as per instructions. Then I extracted Oblivion - Textures - Compressed.bsa toa folder, then overwrote these files with the files from my vibrant folder.
Started a vanilla GOTY game with the updated bsa (had to compress it to keep the file size under 2GB).
I was surprised that the game still used vanilla textures, as I thought that vibrant ones overwrote them. I had no loose files, so that was strange.
I then configured archive invalidation manually (as I did not have OBMM or Wrye Bash installed at this point) by puting the archiveinvalidated bsa file in the data folder and modifing the oblivion.ini file.
Loaded the save and BAM, I had vibrant textures.
So the lesson is you need archiveinvalidation if you make changes to the core files. If I am wrong I hope someone corrects me. I am just posting this in case someone is or has done something similar and can maybe offer further advice. My challage will be to modify the vanilla meshes and textures bsa files with HGEC meshes and textures and QTP3 textures. The QTP3 will be a challenge as I am sure I will need 2 Oblivion - Textures bsa files, thus requiring a modification to the oblivion.ini file again for the bsa search string.