i know OBLIVION runs fine on avg computers, and feels great, but in my opinion what makes the game standout is the graphics engione and the lightning and the physics. you cannot truly appreciate the game without most of the details turned on. the graphics just adds to the realism and the feel of the gameplay which is what makes it as good as it is.
Analogy:
its just like comparing a good vodka to a cheap vodka. both of them would get the job done and make u drunk, but the difference is the taste and the feel of the russian vodka.
(See below link on the vodka wars)
http://news.yahoo.com/s/bw/20060410/bs_bw/gb20060407359060
i understand that older generation video cards run this game just fine, that is because they do not have the advanced shaders and the hdr to deal with.
less details= faster performance, but also
less details= less realism of gameplay
LORD OF THE RINGS ANALOGY
now imagine if the LORD OF THE RINGS movie was made by warner brothers, and the kind of bad job they are doing with editing, Nowimagine if the whole (all 3 of them) LORD OF THE RINGS series was condensed and edited into one movie of 3 hours just like what they are doing with harry potter moveis. would you really like it?
its all in the details my friend
its a trade off that many of us cannot bear and hence the need to upgrade to something better for details.