It's been bout a year since I last played Oblivion (It gets tiring after 300 or so hours of play through :P), but if I remember correctly the best one is Qarl's texture pack. And you should also get some water enhancement mods as well as Natural Weather... Oh, and be sure to get Rene's Guard Mod thing... and there's a bunch more.
I also thought that the gamespot package had some good ones; specifically the grass without tiling mod and the distant landscape mod.
Also there is one called natural environments that supposed to be pretty good.
I havent been able to run Oblivion though. Its either my vid card (8800GTS) or the mods; some people said that there will be issues in the sewer beginning with some mods. Idunno.
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