Here's what Oblivion looks like for me...with SLI8x Anti-aliasing (4x Multisample + 2x SLI Supersample), 8x Anisotropic Filtering, and HDR..at 1280x720 (i'm on my 27" LCD TV) with the graphics cranked and it is VERY playable......I'll come back with snaps of Liriel once I can wait long enough for the camera to start 'orbitting' her...the first pic is the actual screenshot, the 2nd pic was doctored with 0.25 blur in Photoshop...I think it looks more realistic...
Original
Photoshop
My PC:
AMD Athlon 64 X2 6400+ (3.2GHz)
2048MB Kingston Dual-Channel DDR2
2x ASUS EN8800GTX 768MB vid cards (SLI)
...and I have my Oblivion disc ripped to ISO (reduces loading times considerably!)