Unofficial Oblivion Patch and
Unofficial Shivering Isles Patch - Fixes tons of bugs Bethesda never got around to fixing. If you have Shivering Isles, install that on top of the normal version.
Oblivion Mod Manager - Absolutely must have if you're planning on having any more than one or two mods intalled. Makes everything soooo much easier, especially when you get used to using mods in OMOD format.
Wrye Bash - To be used with the above, lets you control your mod load order, which is important to avoid conflicts when you have a lot of mods.
Oblivion Script Extender (OBSE) - Allows quite a lot of extra stuff to be done with oblivion scripts. You won't actually use it directly if you don't do any modding yourself, but a lot of good mods require you having this installed.
FCOM: Convergence - getting the entire things is optional, but install at least the latest version of OOO. Use the
CheatSheet to make sure you're properly installing everything.
Lera and Pizz Hiyoko Store - Tons of equipment
Apachii Goddess Store - More Equipment
Optimized Distant Land MAX - Better performance by turning down quality on distant land textures without losing much in visuals. Ignore only if you have a ridiculously powerful computer.
SPAM Level System - Attributes are determined by class and type of character you pick, not by what skills you use. You'll never have to pointlessly grind useless skills to get decent stats. It does require making a new character though. It also comes with a bunch of nice customizable options.
Herbalism and
Harvest Flora - Makes gathering plants more useful and leveling alchemy less boring. In OOO you're probably going to want to have alchemy unless you're really going hardcore on restoration+alteration spells.
Supreme Magicka - My favorite magic mod. Massive improvements on anything magic related: makes magic better in general, alchemy and enchanting become a ton more useful, etc. You don't absolutely have to get this, but I'd recommend getting at least some kind of magic related mod, Oblivion's default magic system is pretty lame.
Streamline - A performance mod that constantly makes minor tweaks to your performance settings for you in order to maintain good framerate. You can configure it to have different settings during combat (so you don't lag at the most important moments), periodically clean video RAM memory buffers, and several other minor performance tweaks.
Operation Optimization - Does quite a lot of optimizing on most of the large meshes used in-game to improve FPS, without any visible loss in quality.
Polys Be Gone! - Lowers the poly count on mundane objects that are all over the place in the game (i.e. models of rocks that are used like 46000 times).
DarkUId DarN - A pretty good UI mod. There's several
re-colors of it available if you don't like the red.
Phinix Waterfix - Makes water look cooler, both from outside and from underwater envoironments.