Actually ive found that turning that grass and tree distance right up actually improoves performance. It seems to load everything at once so you get smooth gameplay once the area is loaded, unlike when the distance is down when the game keeps accessing the hard drive to load more.
Of course youll need a graphics card that can cope with it to get it to run smoother
Also, ive got some screenshots here of the game running on my rig with everything maxed (at 1920x1200). I get 25-30fps in the outside areas, and around the same in the cities (except Anvil which seemes to be particularly taxing on the system, drops down to 15 in the docks area, but theres no stuttering or jumping, its still smooth).
Theres also some comparisons of AA+Bloom vs HDR. (43-02-42 is HDR while the 2 before it are Bloom with AA). I think the HDR is deffinately better looking than the AA
Oblivion Images
Note: This is running on a 3200+ and not my X2, which ive ripped out of the machine as the problems its causing with NFS: MW (even though ive got the ms patch, affinity setter and amd driver installed) are annoying the hell out of me!