In my humble opinion one should at least use an Unofficial patch for TES-Games like for example this one.
Also a mod that makes the UI more PC-friendly is highly recommended like for example the DarNified UI.
And finally a mod that makes the game more interesting like the Oscuro's Oblivion Overhaul without changing the game to much.

I played through most of the Oblivion on shitty old laptop too. Integrated graphics (Intel HD3000). Nothing spectacular to look at, cobwebs look like crap, but it was playable. Just use lowest graphic settins and see if your computer can handle it.

As for the game itself... there are some bad design decisions, and leveling system is the most glaring one (same as in Morrowind, and same level of braindead). If there is only one mod I would recommend, it is some kind of "realistic leveling". this for example, though I can't confirm at the moment that this is the one that I used. Otherwise you practically have to micromanage leveling of individual skills.

It was fine for first few hours in Morrowind which I spent running around Seyda Neen and fighting mudcrabs, making notes on a piece of paper which skill advanced how many times. After that I decided it distracts far too much from doing anything meaningful, and since Oblivion inherited the same system, I installed alternate leveling right from the start.

For oblivion. Hmmm...

Don't rely on making spells/enchantments or the like, I hated how much they nerfed magic.

As for builds or the like, not sure, I never beat the game, got fed up with certain aspects of it (including enchanting) and just couldn't be bothered. Not to mention the annoying difficulty spike in oblivion portals, and of course the equipment level getting ridiculously high when you are higher level making you too easily rich just by fighting muggers and the like.

When I played it on Xbox 360 (the laptop I had could not handle it), I played as a Spellsword that wore heavy armor with the help of the feather enchantment. Feather is useful since it makes your heavy equipment lighter enabling you to carry more stuff especially loot.

The least you'll have to do is to install some mod that removes the retarded level scaling. Level scaling makes character advancement and exploration rather pointless, since everything will be scaled to your level.
I recommend Oscuro's Oblivion Overhaul.

Don't create a custom class without reading up on how the leveling system works. I completely ruined my first attempt with Oblivion that way.

For a first playthrough I think the best way to play is to just pick a class that you like and to play instinctively/naturally. Once you gain a technical understanding of how the stupid leveling system works, you might find yourself constantly bothered by it and stressing over whether or not you are using certain sets of skills enough inbetween levels. That really sucks out the fun for me :P
So I believe ignorance is bliss in this game in that regard, as long as you play one of the stock classes.

It requires a study on its own but will totally worth it IMO: http://www.nexusmods.com/oblivion/mods/12249/?

For old hardware you might seach if thats still out somewhere: [url=http://www.uesp.net/wiki/Tes4Mod:Oldblivion]http://www.uesp.net/wiki/Tes4Mod:Oldblivion[/url]

I do not know how compatible Oldblivion is to anything; never used it myself.

This one was huge for me. I use this mod every playthrough because I used to micromanage levelling to min/max my character. The problem is that the process isn't fun. At all. In fact, it's tedious. Can't recommend it enough.

As mentioned before, definitely use the Unofficial patch.

Here is a list of other mods that improve quality-of-life, but keep the game as close to vanilla as possible.
- Keychain (you'll gather many keys, this reduces clutter)
- Operation Optimization (improve FPS on laptop!)
- LowPoly Grass (more FPS, but I prefer to disable grass altogether if it's that bad. Open the console with ~ and enter "tg" to disable grass)
- Darnified UI (much better UI)

welp. i'm now stuck in sideways cave. :(

If you're going the vanilla route and want to break your game:
- Never level up
- Enter Oblivion portals
- Save right before you get the sigil or orb or whatever
- Continue when you get a Chameleon orb
- Repeat 5 times
- Enchant 5 pieces of armor with said orbs

And now you're permanently invisible.

Oblivion's leveling system is insanely complex if your not used to it and can really hurt your character the first go round. Since its your first Then you need to overhaul the leveling system.

I highly recommend Oblivion XP mod to help with that. They level as you use them and you choose to distribute points or hold on to them. Its truly the only way you can play Oblivion and fight the frustration factor.

As for optimization Here are the patched you'll need:
Unofficial Core
Unofficial Shivering Isles
Unofficial DLC

Low Poly Grass
Oblivion StutterRemover
Operation Optimization

Builds:

With the Oblivion XP installed you are free form to create what ever you want.. magic is fun, stealth is really fun, sword and board is fun too... best part about oblivion is regardless of weapons you can just cast a spell at any moment with the spell key ^_^

Oblivion is a great game that gets repetitive after a while. I did thoroughly enjoy it for a few years with FCOM installed though.

take your time and enjoy the crap out of it. one of my all-time favorite games. If you don't have the Shivering Isles DLC, I HIGHLY recommend. I'm normally anti-DLC, but this ones is amazing. Knights of the Nine is meh.

Hail Sithis.

I second that -- I still remember how it blew my mind, especially in the beginning. And to be fair, it's a full fledged expansion, not a DLC. Personally, i tend to use the term DLC for little addon stuff, like the Horse Armor*.

* Horse Armor my a$$.. :P Nehrim. You don't know what it is right now and you don't need to look it up at the moment. Just write this word in a post-it and look it up after you're done with Oblivion. ;)