See previous post for basic install using Steam/OBMM/BOSS:
ES4O: Digging up Oblivion again (basic setup)

This set of mods will focus mostly on making things pretty or sounding better. There won't be too many game play changes here. The assumption here is that you have already installed the unofficial Oblivion patch (UOP) mods. Some of the mods listed here will overwrite files modified by the UOP mods (which is fine, just install these after the UOPs are activated).

Note: After adding things in OBMM, you should go into "Utilities, Archive Invalidation" and click the "Update Now" button, which will ensure that things work. Don't forget to re-run BOSS after exiting OBMM.

#1 - Natural Environments

Makes the outdoor world much more immersive with storms, seasonal weather, denser foliage, improvements to water. The 2.1.3 version is the latest, and there is an OBMM install script as a separate download.

1. Download Natural Environments 2.1.3, extract to an empty folder
2. Extract the contents of the OBMM install script (7Z-packed EXE) into the same folder.
3. In Oblivion Mod Manager, click Create --> Add folder, choose the folder you just extracted to, click yes to everything.
4. Click the "Create OMOD" button, then install using double-click.
5. Exit OBMM, run BOSS, and see whether you can still get to the Oblivion start screen.

#2 - Alive Waters

Boosts the amount of fish, seaweed, underwater treasure that can be found in the lakes and rivers of the province.

1. Extract the contents of the archive to a new folder, check out the README file.
2. You'll want to create an OMOD from the folder and install all of the ESPs.

#3 - Qarl Texture Pack 3 Redimized and further reduced OMOD

Improves upon many of the textures within Oblivion. It's a fairly large download, but it comes packaged as an OMOD. So fairly easy to install / remove.

#4 - IFT Improved Facial Textures

Improves the facial textures of the stock bodies. There are other face / facial mods out there, so you may need to pick and choose.

#5 - Painted Paintings

Updates the in-game paintings to look more like hand-painted works.

#6 - LBM Weathered Direction Signs

Pretties up the road signs. Conflicts slightly with Qarls, so you should install Qarl's Texture Pack first, then install this one.

#7 - Unique Signs

Makes the shop / city signs better.

#8 - Darnified UI

The default Oblivion UI is designed for a standard definition TV screen. DarnUI makes it so that it works better on a high-def computer screen.

#9 - Drath Samid Hand Painted Map of Cyrodiil

I prefer the "Hand Inked Map of Cyrodiil Dark No Grid" version. It goes well with DarnUI.

#10 - A few sound tweaks

Oblivion Stereo Sound Overhaul
Symphony of Violence - Combat Sound Enhancement

#11 - Alluring Potion Bottles

Spices up the potion bottles in the game. If you like it, you may also want to look into adding Alluring Wine Bottles.

#12 - Glittering Prizes

Add some sparkle to your treasures.

#13 - Book Jackets (requires work)

Improves on the book covers of books that you can collect/read. I suggest the "standard res" version to start with. Note that you cannot just create an OMOD file from the compressed 7Z file, you must unpack the archive and remove one of the two main ESM files first. The ReadMe file inside explains the process and what the optional files do.

Since we're not using the "Book Placement" mod (yet), delete the "Book Jackets Oblivion - BP.esp" file. You will also want to delete the "Book Jackets Alternates" folder, unless you really want the alternates for the (5) unique books that already had covers in the game.

After that, you can create an OMOD from the folder.

#14 - Harvest Flora (OOO includes 3.0.0)

Designed to change the look of things after you loot them so that you can get a better idea of whether an area of flora has respawned. The OOO version 1.34b5 includes 3.00 of Harvest Flora, so you should go out and install 3.0.1 and tell OOO not to use its version when you do the OOO install.

# 15 - Harvest Containers (skip if using OOO)

Be sure to grab the Shivering Isles version if you have the Shivering Isles expansion installed. Note this is not compatible with Oscuro's Oblivion Overhaul (which I recommend that you use), so you will want to skip installation of this mod and go with OOO instead.

#16 - Improved Soulgems

Adds color to the existing soul gems so that they are easier to tell apart.

#17 - Darker Dungeons

This will require that you use some sort of night vision spell or a mod that lets you drop torches onto the ground, or light up the area inside of caves & dungeons. Works best if it appears late in the load order.

#18 - Camera mods

By default, the 3rd person view camera in Oblivion shakes too much and is rather prone to induce nausea in many people. Your choices for fixing this are either Growlfs Fixed Camera or ChaseCameraMod.