I just wanted to say that this thread was really helpful. I have the exact same card, and have been playing Oblivion on ultra high at 1280x1024. The only things that aren't on or maxed for my setup are:
Self Shadows Off
Grass Shadows Off
Grass distance slider bar in middle
Shadow slider bars in middle
I am getting >30fps almost everywhere. If I go off into the middle of the forest, with all the foliage etc, my frames can drop down to the low 20s, but I really had to try hard to get them to drop to less than 20fps (ie went into a bunch of ferns fighting an imp and throwing spells everywhere), and even then it was only 19fps. Note, my system has 2GB RAM whereas the instigator of this thread only had 1GB.
I haven't been using AA since I didn't know you could force it with HDR. I've gone and turned it on, it is now at 2xAA/4xAF, but I haven't really seen any performance difference. I've found in a lot of games the jump between no AA and 2xAA is a bit bigger than going to higher levels of AA, so I tend not to use higher than 2xAA for performance reasons.
I think some people tend to overtalk their setup and say they are playing with "everything maxed" when they really mean "ultra high". I've said "everything maxed" before when talking with friends, but what I really mean is "almost everything maxed". Compared to my old 9600xt, that is everything maxed!
Thanks again to those who contributed to this thread. If you are reading this and considering an x1950xt for play with Oblivion, go get it! (assuming you are going to play at 1280x1024, which is just fine for me) I think the last time I checked newegg they were down to $220 (after rebate). Seriously, I don't think I've ever conciously noticed lag. And I'm not overclocking either.
Good Oblivion patch: there is one where you level half as fast. I don't have it yet, but I'm going to get it. The monsters scale way quicker as you increase in lvl than the stuff you find to use against them. In most games going up in lvl is a good thing, but in Oblivion it is bad because the monsters can get too tough before you have the right equipment to deal with them.