It seems OMOD is a pretty important tool, yet I can't find it anywhere. Can someone give me a direct link?

http://tesnexus.com/downloads/file.php?id=2097

for future reference, when in doubt search TESnexus

The tool is OBMM - http://www.tesnexus.com/downloads/file.php?id=2097
It creates OMOD which you install and use.

Oh, so it's just the mod manager, that's why I couldn't find it...I thought it was something new called OMOD...have been away for quite some time.

Use Wrye Bash http://www.tesnexus.com/downloads/file.php?id=22368 instead

Use both of them. However, its best to always use Bain (the installer in Wrye Bash) for installation unless the mod is either packaged as an OMOD (in which case you've got no choice) or comes with and OMOD script and is not packaged for Bain as well.

This is what I'd recommend as well, since both programs have functions that are very useful, I might even say essential, for players who intend to use lots of mods together. For things that either problem can do, I prefer Oblivion Mod Manager as its simpler to use, but Wrye Bash is good for the functions that are unique to it.

Being able to use OMODs is only one of many useful functions that OBMM offers, and in fact, I haven't downloaded all that many mods that are only available in OMOD format, often, there's either an OMOD or non-OMOD archive available, or, more often, they're distributed in "OMOD ready" archives, meaning that you can install them manually but converting them into OMODs is quite simple if you so choose, so more often than not, it seems that the OMOD format is a matter of convenience rather than necessity, still, even if you don't use OMODs, the other functions of the mod manager are also quite useful.

Just wanted to clear this part up. The part in bold is simply not true. You can extract the .omod archive to folders and repackage it anyway you wish. OBMM has the ability to do this, naturally.

And just to toss my opinion in the mix. Wrye Bash and BAIN are by far the superior tool/method of installation. It's true OBMM has it's purpose and some folks prefer it's installation method. I however prefer to have full control over my installation and be able to see exactly which files are going where and what conflicts are occurring. I can then alter my Installation Order appropriately without having to guess at which file is missing or what mod overwrote it.

Personally I only use OBMM for BSA extraction and then repacking them.

To each their own though. Use what works best for you, and what you're more comfortable with.

Now I feel like a complete dill....