Vanilla means unmodded, and thats nonsence. Ive played and loved Oblivion on PS3 forever.
But the game was meant to be played with mods. There's the unofficial patches, which fix a bunch of glitches and object placement errors that Bethesda didn't even care enough to fix themselves. Overhaul mods (Francesco's Leveled Creatures & Items, Oscuro's Oblivion Overhaul, WarCry, Martigen's Monster Mod) which fix the piss-poor excuse of a leveling system, which as we all know punishes the player for not being a munchkin (Francesco's and Oscuro's overhauls also fix the problem of some skills increasing faster than others. And then there's FCOM, which lets you use all four of these overhauls at once). Body replacers (The vanilla body models are pretty underdeveloped for an RPG hero). Deadly Reflex, which makes combat more realistic. (Why give us a sword if we can't decapitate our enemies and see the damage we do? Don't tell us the system can't handle it because that's a damn lie. There was no legitimate reason to not make combat realistic.) Custom races (Some of which come with COBL). Ingredients (COBL adds a bunch of ingredients from Daggerfall and Morrowind, thus opening up more possibilities for the aspiring alchemist). Ad infinitum.
Back on topic: I'd never use any of the beast races. Sure, they may make for good thieves, but you can get the same water-breathing and night-eye effects through spells, potions, and enchanted items.