I use a 7900GS on my 22" monitor. I am slightly overclocked (I think it's at 530mhz now, not the 550 in my sig). I haven't played Oblivion in a while, but from what I remember it is very playable. I know I have high quality textures, reflections, am using HDR, etc. I think I only have building/character shadows on. I don't remember where I put the sliders beyond that... but anyway, it plays decently.
I have also been playing a lot of Titan Quest, it gets choppy here and there, but over all it's very playable. - *edit, also I have the quality maxed on that.
The only other game I have been playing a bit lately is HOMM5, I have that pretty much maxed and it's smooth as silk.
The 7900GS will do ok at 1680x1050, just don't expect miracles.