What do I get, I just started modding my game and I'm overwhelmed by the amount mods there are.

I have a great computer so performance hits are not an issue, I just want my game to look as good as possible.

Maybe something to give me a body in first person.

You pick what you want, it's that simple. Pick whatever appeals to you. You could also go through this: http://devnull.sweetdanger.net/obliviontextureoverhaul.html
It's a bit outdated, but a lot of the information still remains relevant for informational purposes to an extent.

I mean what works together?

And what arethe good texture mods?

Compatibility is as simple as what they replace. That you can tell from the readmes and descriptions. If you want to replace less than all of a graphics replacer, BAIN will be able to tell you what it will be overwritten with and all. Really, you use what appeals to you. What are good texture replacers is all down to the user to decide. No one can decide what looks good for you.

Do be careful. Even some of NASA's hardware would have issues running a heavily modded Oblivion.

What I'm looking for texture wise, is like the defaults, just higher resolution. No fancy changes, I just want a more defined and less grainy world.

If that be your criteria, check out the various high-res city texture packs of Mikal33. His http://www.tesnexus.com/downloads/file.php?id=8954 is bar none my favorite city pack. The others ain't been either. Sadly, I have no solid recommendation for the wilderness, the high-res textures I use being no longer available for download.

Check this out... this is hi-resolution texture pack with vanilla feel: http://www.tesnexus.com/downloads/file.php?id=10419

If you want to have a smoother landscape you can use gruftikus tool:

http://www.tesnexus.com/downloads/file.php?id=40549

Try http://tesnexus.com/downloads/file.php?id=18677. They keep the vanilla design while upping the resolution and color definition.

This: http://www.tesnexus.com/downloads/file.php?id=38204
This: http://www.tesnexus.com/downloads/file.php?id=41118
This: Any one of a number of LOD mods - I use a 2048 x 2048 one, but there are also higher resolutions out there, too.

I would suggest this one:

Really Textured Normal Maps
http://www.tesnexus.com/downloads/file.php?id=38204

Textures are one thing, but you can easily see the polygons and flat surfaces if you look for it.
Parallax normal maps uses depth trickery, and I like to use OBGE for the SSAO to compliment it.

My personal combo:
- QTP3 Redimized (http://planetelderscrolls.gamespy.com/View.php?view=oblivionmods.detail&id=3813)
- All of Mikal33's sets (http://tesnexus.com/modules/members/index.php?id=153868)
- Koldorn's caves, sewers, and ayleid ruins (http://www.tesnexus.com/modules/members/index.php?id=66583)

...although... after looking at the screens from Really Textured Normal Maps (http://www.tesnexus.com/downloads/file.php?id=38204), I am thinking of switching to that... those look REALLY nice... but I'm assuming that are not compatible with the packs I listed above... hmmm...

RTNM is awesome.
You won't regret it!

Really Textured Normal Maps is stock sized normal maps that does all vanilla architecture, armor, many clothes, all creatures, all types of dungeons, plants, rocks, trees, Oblivion. Virtually everything except for clutter and exterior roads texture.

To my knowledge, QTP3 already comes with parallax normal maps ( look in the textures for files that end in _n.dds, those are the normal maps. For example FortRock03.dds would be a texture and FortRock03_n.dds would be the normal map for it. If you mix QTP3 with RTNM then I imagine it can look very bad, especially on rock bricks that don't match up with the pattern from a different normal map. This is just a guess, though.

RTNM is severe in its mapping, and I find that architecture and rocks are much chunkier. You will see a lot of bumps and blocks and grooves on doors that make you want to open your mouth and drag your teeth across them. Something that a ninja would have no trouble climbing with his talon thingies. Coming from Skyrim I like the primitive look, but I hate what it does to the town guard uniforms and to the floor texture in forts.

Other than that, it made an impression on me and I resented not having found it earlier.

You might want to check out Bomret's Normal Maps for Vanilla, as they look nice if you want more details, neat rows of rock bricks, and less chunkiness.

Bomret's Detailed Normal Maps for Vanilla 1.1
http://www.tesnexus.com/downloads/file.php?id=18430

and for races, what do you think about:

Vanilla Race Deluxe
http://tesnexus.com/downloads/file.php?id=39823

(it also requires:
-http://www.tesnexus.com/downloads/file.php?id=40532 and http://www.tesnexus.com/downloads/file.php?id=15802(or other body compatible with them, such as HGEC BBB or DMRA or DMRA BBB)
- http://www.tesnexus.com/downloads/file.php?id=24078 )

Would this conflict with Race Balancing Project's textures?
(But perhaps VRD is nicer than RBP...)

You could also take a look at darooz's retexture project both for skyrim and oblivion...http://www.darooz.com/ it has been on hold for some weeks but the author is retexturing again!

Why is it so hard to choose a texture pack?

It's a lil hard to chose which you like best without front it ingame.

Because the choices are so good? It's like having to choose between a Ferrari or a Porsche... or a Lamborghini... or a Lotus... mmmm Lotus...

Actually, these two mods are quite different.
RBP changes a lot of settings and attributes of races, and it adds some new races as well.
VRD didn't change any attributes or add any new races. All what it does is to enhance the looking of races.

RBP full 284 mb of gfx. http://theelderscrolls.info/?go=dlfile&fileid=293

Do Optimized facegen files, and Tamriel NPC Revamped conflict?

Does VORB, and the Better Looking Redguards, Beter Looking Dark Elves, and Better Looking Wood Elves conflict?

Not as far as I can see, I'm running both and it all looks rosy.

Optimized Facegen files is really good, but it wants OBMM in BSA Invalidation mode in order to modify the facegen files of npcs. When I used that mode more and more textures began to turn into a black texture. Some clothes, imperial guard helmets, ears on all actors. So I had to switch it back to BSA Redirection to fix the textures, and it seems that the facegen files are no longer affecting other actors.