Superb graphics. When I started playing this game it was marvelous just looking at the scenery and the sky, at the sunset, starred sky and sunrise.
Have you ever been exasperated because a game confines your movement to a very narrow path from which you cannot deviate? Even if some level is supposed to be located in the wilderness, your movements are still very limited and confined, usually blocked by very artificial barricades? Have you ever wished you could just take a random direction and start walking to see what's there?
If that is the case, then this game is definitely for you. Not only is the outworld absolutely huge and completely free to be explored, it's all marvelously realistic. Walking on the outworld of this game is almost like walking in real-life nature: All geographical formations, all vegetation, lakes, rocks, fallen trees, hills, valleys, mountain tops, ruins... everything looks just very natural. There's no repetition (as is the case with other games with more or less free movement). Basically every place in the outworld is unique and different, just like in real-life. And if your computer is powerful enough, all this is rendered with superb graphics.
The modern fashion is to make games which look very pretty but which are extremely short. Many of these modern games can be played through in 3-4 days. Not so with Oblivion: It looks quite pretty, but it's not a short game at all. In fact, it's a very long game. Even the main story arc takes a rather long time to play through (it took me over a month to play it through). In addition there are literally over a hundred smaller side quests which you can perfrom in any order you like (except side quests which depend on previous side quests, of course).
Unlike in many other RPGs, you don't get exp which you artificially allocate to abilities. Instead, you learn what you train. Want to get stronger at swordsmanship? Then train fighting with the sword. Want to get stronger at archery? Then train fighting with the bow and arrows. And so on. Another advantage of this system is that you can't waste exp on skills which you later notice you don't need for anything after all. If you trained some skill you don't really need, then that's not away from anything else.
The guilds are an interesting addition to the game. Advancing in each guild requires performing tasks (basically side quests), some of which can be quite thrilling. (For example many of the thieves guild tasks are quite similar in nature to stealth-based games.) It's quite interesting to be, for example, a member of the thieves guild and the fighters guild at the same time, given their opposite nature.
At the time of the publication of the game the hardware requirements needed to get even a decent rendering quality were pretty high. Even with a very top-of-the-line gaming computer it was difficult to get even close to the maximum rendering quality. The game gets extremely ugly with low rendering settings. This was especially frustating given that other games published at the same time had terrific visuals yet required much less powerful hardware (Half-Life 2 being a perfect example). Of course nowadays this is becoming less and less an issue with modern hardware.
Character animation, especially facial expressions, seemed to be a bit lacking. Like they didn't have the time to perfect them. The "acting" of the characters, especially when talking, seemed quite artificial and rigid.
One of the most annoying features of the game is the behavior of your temporary allies: They constantly get in your way. Whan you are fighting with an enemy, your allies will constantly jump in front of you, and thus you will easily hit your allies. Hitting your allies can have all kinds of undesired consequences, such as being expelled from a guild.
Regardless of the complete non-linearity of the outer world and the almost complete non-linearity of quest-solving (ie. you can choose to complete quests in almost any order you like), the quests themselves are utterly linear. Most of the time there's an arrow telling you where to go, and quests are basically of the type "follow the arrow and kill all the monsters in the way". There were basically no searching puzzles or almost any other types of puzzles at all. This was rather anticlimactic compared to the non-linearity of the outer world.
The game uses the Havoc physics engine, but it's used 100% for visual elements only. It plays absolutely no part in puzzle-solving or anything else. The physics engine is completely underused.
The difficulty of the game is quite erratic. This can be seen from the very various opinions people have about the difficulty of this game. In my case the game started being extremely difficult, at places almost impossible, but as I trained the major fighting skills to the max the game became extremely easy. Normally games usually start easy and get more difficult over time, not the other way around.
Curiously, some people complain about the exact opposite (I don't really understand how that is possible, though).
The game uses a path-finding algorithm for enemies: When an enemy spots you, it will calculate a path to get to you regardless of what obstacles there may be in the way (in other words, it will never get stuck if such a path exists). In some cases, however, this feature gets quite ridiculous (and unrealistic) dimensions:
Assume that you are, for example, on an overhead bridge, and in the chamber below you there's a low-IQ animal, such as a rat. If you, for example, shoot an arrow and hit the ground near the rat, the rat will not only automatically know immediately where the arrow came from, but it will also find a path to your current location no matter how long it is, even if the path requires it to run through a half mile of contrived corridors around the level (hidden from view from its current location). Even if it takes 10 minutes for the rat to reach your current location because the path is so long, it will nevertheless eventually get there.
It's like the rat is not only highly intelligent, but it also has the entire level map memorized and can in a split second calculate the optimal path to your location (which, technically speaking, is the case, as it's programmed to do so). And mind you, rats in this game are just regular rats (albeit somewhat larger than real rats), nothing else.
The same is true for NPC's which supposedly have never been in that place before. For example if an NPC is following you in an escort mission and you jump off that overhead bridge to the chamber below, the NPC will not jump (clearly not programmed to do so) but instead will find that optimal half-mile route through the contrived passages he has (plotwise) never seen before.
This is not really a negative point, just an amusing feature.