Everyone should have played Oblivion. If not, or if anyone just forgot which mods are the necessary ones, this guide should help you out. As with other Bethesda games, installing mods is usually as simple as dragging and dropping stuff into your OblivionData folder. Installation order shouldn't matter. When it comes to load order, just be sure Oblivion.esm is at the top, with the DLC shortly after.
You'll want to install all of these before starting a new character.
BE SURE TO READ THE DESCRIPTIONS FOR EVERY MOD, READ THE ENTIRE ARTICLE, AND BE SURE TO DOWNLOAD/INSTALL EVERY SINGLE MOD IN ORDER TO MINIMIZE ERRORS AND MAXIMIZE AWESOMENESS!
This is a necessary tool for sorting mods, and even installing some.

This is necessary in order for some mods to work. All you have to do is install it and never touch it again.
This mod allows you to use various graphics plugins for Oblivion, some of which are included on separate download links on that page.

A huge mod that redoes various regions in the game, making them look more lively, detailed, and beautiful.

This is a weather/vegetation/water overhaul, with various plugins. Remember to only choose one weather plugin.

Oblivion Character Overhaul 2.0
Another must-have mod. Oblivion Character Overhaul enhances character models to make them look more modern and less... bloated, distorted, or otherwise messed up.
A big texture overhaul for Oblivion.
Like the mod for Skyrim, Midas Magic adds a ton of new spells to Oblivion.
This mod is an absolute necessity: it overhauls the UI for Oblivion, including the inventory which was terrible before mods.

As the name suggests, this mod adds a ton of new weapons.