Shame there's no mods for the PS3 version, I'm feeling a tad underwhelmed by the default experience. Still interesting and all but the story is a bit lacking, it feels sort of like an MMO

I can't believe my eyes... constructive criticism on Oblivion and Fallout 3, without bashing of the game :)) Seriously... even Fallout 1+2 section of this forum is full of fanboys screaming at F3, just because of the number 3 in its name.
Anyway, what did you people expect from F3? :) When Bethesda started creating F3, they had the skeleton and engine ready from Oblivion. It was "just" the matter of creating the proper world and fun quests. After that, they took everything that people criticized about Oblivion and made it better :) (I laughed out hard when I saw the keychain in Fallout inventory - it was basically a copy-pasted user plugin for Oblivion).
My Morrowind directory has 10GB and Oblivion directory 22GB and I know the limitations of Gamebryo engine preety well... and I have to be amazed at what Bethesda managed to create in Fallout 3. Comparing to Oblivion, it is a more polished, technologically advanced game that, at least technically, wins in all areas.
If I would compare console versions (i.e. no mods) of those games, Fallout definitely wins. The problem of Fallout is a relatively low replayabilty. It has an amazing world, amazing quests, incredible atmosphere... but once you finish everything once, the second and third playthrough is more or less the same everytime.
So if I have to choose a definite answer, Oblivion wins. Maybe by default it is sometimes a bit generic and boring, but the incredibne amount of plugins available for it can make it a neverending game. New worlds, new races, quest mods putting Bethesda's own quests into shadow. And there is something for everyone. While Fallout has some great mods, they didn't create this illusion of neverending game for me.
Funny... not a long time ago, I was saying that nothing can beat Morrowind. But the amazing modding community of Oblivion made it evolve a LOT further than everyone was expecting and it's a game I can always start over again and again, almost feeling like I play for the first time again :)

And here I go installing it again. Just because of this thread.

I tried playing both Morrowind and Oblivion on the xbox and could not get use to the control. How are the controls on the ps3 coming from a pc gamer? Also, is it possable to hook a usb mouse and keyboard into the ps3 and play as if it was on PC?

They're pretty much what you'd expect from a first person shooter style game, for fallout 3 on the 360 they felt reasonably good as far as console shooter controls go but oblivion on the ps3 feels clunkier for some reason

Both games are fantastic and I'm a huge fan of both franchises. Can't wait to see what Bethesda does next.

Beth is working on TESV and there is also New Vegas coming soon. Its going to lack the massive DLC and just anty-up in the first run... We might see some side stuff created but its going to scream polish and professionalism. I am beyond excited for both...
Tes5 and New Vegas are going to be the games to have... Lessons learned over 20 years of gaming and franchise work will do that to a game ^_^

Well, technically Obsidian is developing New Vegas, although Bethesda is publishing. Either way it should be a great game. I have a lot of faith in Obsidian Entertainment. I am definitely excited for both New Vegas & TES5 as well. There's a lot to look forward to :)

Both as buggy as each other.
Oblivion tends to crash upon exiting. (Steam version)
Fallout 3 crashes randomly every now and then. (Steam version)
If I bought the asian version of Fallout 3 (ie. Singapore version), I won't be able to buy DLCs nor update the game properly. Fortunately, mine was from Steam.

I picked up Fallout 3: GOTY Edition thru Direct2Drive for 24.00 a few months back. Has all the DLC packs. Really like this game. The exploration is vast. I'm only at Level 5 so far but I am getting a nice tour of a dead Washington DC. It will be a while before I play New Vegas,
I can find Oblivion (new) on eBay for 4.00. Will play that some time in the future after all the other games I haven't played (but own) yet.
The last store bought games I bought were during Circuit City's expiration sale, Crysis and Crysis: Warhead, @15.00. I find no reason to shop at Gamestop anymore as they have all but abandoned PC games here.

I absolutely loved Oblivion, even if Morrowind was much better. For some reason I just couldn't get into Fallout 3 the way I did with Oblivion. I think it's the setting, the Fallout setting is just a bit too much of a downer to me. But I also enjoy that kind of settings, so I guess I just played it at a bad time.
Then again, I still have the game on my X360, maybe I'll give it another go sometime. But I just loved exploring Oblivion's fantastic environment, even if there was little to do besides the random dungeons. If the game had the levelling system of Morrowind, or even Fallout, it could've been one of my favourite games of all time. I sincerely hope that The Elder Scrolls V rectifies the problems with Oblivion. If it's ever coming out.

Alot of the reason i liked oblivion was i could steal everything. In fallout 3 it made me feel bad about it.

That is a very important point. I know a guy who buys even shitty games and then gets all the mods for it that make it decent but at least for my money, if I have to rely on unprofessional third parties to FIX a game before it becomes bearable (I'm looking at you Armed Assault!) then I'm sure as fuck not paying full price for it, it's a bargain bin sale IF I feel that its worth all the messing around and most of the time its not.
Be fair, if he's following the traditional adventure game hero trope of stealing everything thats not nailed down including a claw hammer that he can use to remove the irritating nails then he's likely on first name terms with all the fences around.

I can interest you in Star Trek: Legacy then? Utter garbage as a game but made playable with mods. Coincidentally also published by Bethesda.