Yes it is actually handling the cleanest out there. But many users have difficulties such simple things and a plugin can help in this case. Also do some mods like OOO.
um actually all you have to do is find benableborders in the oblivion ini and change it to 0 to disable borders(i think that it is bEnableBorders) but yeah if you go to the oblivion ini file and change the line that mentions borders to 0 then there are no borders.
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