I intend to play it on PC, all the way.
*It is easy to fix things via the console if you screw up
*You can download mods. Mods make Morrowind an infinitely more interesting game. I have no doubt that Oblivion will be the same, and I also doubt that you will be able to add as many mods via the new XBox.
*As others have noted, a computer gives you so much more.
I won't, however, be able to play it on my present beast. But, I am in the happy situation where I plan to buy a new PC in the next year or so. By that time, Oblivion will be out, so I'll know *exactly* what the actual requirements are, and I don't have to sit here biting my nails while wondering if my present PC will run the game. It is nearly five years old, and I know it won't
Hmm.. maybe by the time I get a new PC, there'll be a GOTY edition of Oblivion out that I can scoop up for a steal