The Elder Scrolls IV: Oblivion Performance Guides
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In fact, that's putting it mildly, as Oblivion sports some of the fanciest outdoor environments ever to grace the PC. Remember the first time you booted up Far Cry or saw 3DMark 2001's Nature demo and your jaw dropped to the floor? The outdoor scenery in Oblivion puts both of those to shame once the graphics settings are cranked up. But herein lies the problem, once the visual eye candy settings are bumped up to their maximums, your frame rate can quickly trickle to a crawl with even the latest high-end graphics cards. There are numerous posts in the Oblivion forums from users reporting poor frame rates; when I picked up a copy of the game at my local Gamestop, the sales clerk made sure to ask if my system was capable of handling the game's hefty system requirements before ringing me up. He was pretty adamant that the game's minimum requirements were far too conservative, particularly on the graphics side of the equation, only asking for a (128MB Direct3D compatible video card and DirectX 9.0 compatible driver). There are plenty of GeForce and Radeon cards with 64-bit memory interfaces that meet this requirement!
And a snip from the article at TweakGuides:
By default, each time Oblivion loads up, it reads the values held in the Oblivion.ini file stored under your \Documents and Settings\[User]\My Documents\My Games\Oblivion directory. This file can be opened and edited using a text editor like Windows Notepad or Wordpad, however before editing it, first change all of your in-game settings to the way you want them, then close Oblivion and make a backup copy of this file. If at any time you want to find the default values for any of the .ini variables, open the Oblivion_default.ini file under your \Program Files\Bethesda Softworks\Oblivion directory. This file contains all the defaults for Oblivion on your system, and should never be edited or deleted. If you want the game to quickly restore all the default values for your Oblivion.ini file, simply delete the Oblivion.ini file and it will be recreated with the default values the next time you start Oblivion. This can help to quickly resolve any problems you may be having as a result of incorrectly tweaking variables, however obviously you will lose all your customizations as well as your in-game settings preferences.