This mod is probably not useful for the average user. It is intended to solve the astonishingly bad performance at night in crowded places when an NPC torch mod is installed. In conjunction with mods that add many NPCs such as Better Cities and Crowded Roads, dozens of torches can slow the game to a crawl at nighttime. I have a playable level of FPS in these areas during the daytime but it strays awfully close to being a slideshow at night. Heavily affected areas include:

Market District
Waterfront District
Anvil Docks
Bravil Docks
Anywhere there are 3 or more people holding torches

Compatibility
This mod ONLY changes the standard torch. This will have no impact on any mod torches. This mod may have a negligible impact on performance if you don't have a mod that lets NPCs hold torches, and there is a better mod that covers all lights in Oblivion if you need that kind of performance gain.
No Lights Flicker

This mod provides further benefit to users who have enabled Linear lighting mode in the INI as well as users of mods that increase the range or brightness of the torch. This is because of how Oblivion renders light sources, flickering lights use up far more resources to draw. Every flickering light that crosses the radius of another flickering light increases the complexity of the final result. Adding in further lights just kills the render, Oblivion was simply never designed to have more than one to two overlapping flickering lights at a time. Notice how most things that flicker such as candles are actually a single light point that wobbles around, rather than each individual candle having it's own flicker. This is also why the Construction Set has a few versions of each light source, frequently options with and without flicker. A wider torch range forces the game to have many more overlapping light sources, the whole NPCs holding torches situation is like a worst-case scenario for the game engine, it's an effective stress test really. Good way to configure your INI settings and work out bugs.