Here are a few tweaking guides for Oblivion that helped me squeeze some performance from this game:
Optimizing Oblivion v3.0: Into Modblivion (atomic pc)
Note: ‘over tweaking’ the oblivion.ini file can result in degraded performance. Especially if you switched to the 1.2 version of the game (either with the official patch or through Shivering Isle).
If you did upgrade, it is recommended to rename your ‘oblivion.ini’ file, let Oblivion create a new default copy and then, use a file compare utility (such as beyonCompare) to bring in some of your old tweaks back into the new file.
Version 1.2 of the game is relying on several changes to the configuration file that you may be missing or altered with an older tweaked file.
For a few lists of graphical improvements :
Better Oblivion: Graphical improvements