I find it amusing when people compare Oblivion to games like D3 or HL2 and then complain on how 'badly programmed' Oblivion must be, or how much of a system hog it is.
I think Oblivion is pretty much unprecedented. The reason it is such a system hog is because of the sprawling, extensive overworld, which is absolutely stunning. Regular FPSs are very 'canned' experiences where exploration is not possible. Even HL2, as good as it might be, is very linear. Games like Q4 or D3 are just corridor-crawls, and it wouldn't be fair to compare them to Oblivion's overworld, and its feel-free to go anywhere and do anything massiveness. The only game I can think of that provides such freedom is GTA:San Andreas, and it looks pretty bad, compared to Oblivion. No wonder Oblivion requires such powerful hardware, when it has to render a realistic and gargantum world of such magnitude! 'Normal' FPS are pretty simplistic experiences, in comparison.
In contrast, look at Oblivion's dungeons and indoor areas, which could fairly be compared to standard FPSs. And for the most part, they run pretty well. I get comparable, if not better fps in Oblivion's dungeons than in Q4, and they look equally good.