Oblivion is, without doubt, a captivating game, but lacks a number of essential details including quality voice acting; variety of beasties; and balanced, challenging gameplay.  This patch is an effort to at least attend the balance and challenge deficiencies.  Godly items, or any combination of items that leads a player to be invulnerable to attack rather defeats the purpose of playing, so far as I'm concerned.  That in mind, a number of enchantments have been notably reduced, and the offensive potential of critters and NPC's have been increased, and elite variants of existing critters have been introduced, posing a notably increased threat.  To survive these changes, your character must be balanced in offensive and defensive capabilities!
  Fear not!  As well as making foes more imposing, and all but eliminating the potential for invulnerability, other aspects of the game have been altered to help you reach the needed balance.  All weapons in the game have been revamped for greater efficacy (as well as eliminating certain native bugs therein), and Sigil Stones have become significantly more powerful, now offering a total of six effects each -- three offensive, three defensive.  Numerous other changes, some small, some large, have been made, including, but not limited to, more sensibly designated barter gold for nearly all merchants, a complete overhaul of alchemical ingredients, and a few bug fixes otherwise not addressed by the Unofficial Oblivion Patch (which I highly recommend downloading).
  There are three critical rules employed in the making of this patch.  First, that characters should not be impervious to all attacks.  This is the reason for the impairment of a number of enchantments.  Second, that things should make at least -some- sense; I.E.: no endoskeletal remains from crabs, spider daedra, and land dreughs; oysters (not clams) that produce pearls.  And thirdly, that for each new threat,  there should be an appropriate defensive option, which may prove to be in the form of running the hell away from something you know you can't take down yet.
  For a complete list of details on all changes is shown in the ReadMe file for both the main patch and the Shivering Isles patch, but you might want to preserve the mystery to add to the ensemble... which might give you a laugh... or a headache.  Oh, and if you want a black hood or robe at any time, talk to Shady Sam.  He sells them now.
  This patch has been designed for use with Elys Uncapper, which requires the Oblivion Script Extender (OBSE), and a game difficulty level of 75%.  If you find something awry with the patch, or if you have any suggestions for additions to it, please let me know.  Immersive effects are intended to be added, but permission to use such files is currently in question.  Please note also that some changes, like the barter gold for merchants, and some landscape changes that have been made may not be applied unless to a new game.  To ensure the LOD changes are properly applied, use the LODGen program available at http://www.nexusmods.com/oblivion/mods/15781.  A list of all merchants affected by this mod is in the ReadMe file included with the patch, as well as their intended barter gold.  To manually change a merchant's barter gold in-game, hit the tild (~) key when in sight of the merchant, click on the merchant, and type in "setbartergold to X" without quotes where X is the value listed in the ReadMe for that merchant's barter gold.