cjrgreen: See the Construction Set Wiki:
http://cs.elderscrolls.com/constwiki/index.php/Main_Page and the Beginner's Guide: [url=http://cs.elderscrolls.com/constwiki/index.php/Category:A_beginner%27s_guide]http://cs.elderscrolls.com/constwiki/index.php/Category:A_beginner%27s_guide[/url]
OBSE, which is heavily used by Oblivion mods (it adds a lot of script functionality), needs care in installation to make it work with a Steam copy. See
http://forums.steampowered.com/forums/archive/index.php/t-900993.html ShogunDarius: that guide seems more orientated to making mods than what i meant which is installing them
Oh,
installing. Each mod comes with its own installation instructions (usually in a README file), which you will need to read, understand, and follow.
Apart from mods with irregular installation requirements, there are maybe four different ways to install them.
1. Unpack the files in place. Most simple mods work this way. Just unpack the files into the folder structure under Oblivion\Data.
2. Use OBMM (Oblivion Mod Manager). Highly recommended. If you have OBMM installed, you can use it to install mods packaged as OMOD files (suffix .omod) and convert simple mods to OMODs. You can use OBMM to activate, deactivate, and reorder mods easily.
3. The mod may be packaged as an executable installer (.exe or .msi). If so, just run the installer.
4. Complex mods that change gameplay tend to create lots of conflicts (especially involving leveled lists) that must be resolved for the mod to work. Any of the overhaul mods will fall into this category. Such mods are merged into a "Bashed Patch", using the tool "Wrye Bash". The READMEs that come with these mods will explain how.