So, after some time I am having an Oblivion run through to see how it has aged. So I have followed Brevelix's excellent guide on nexus, which really does up the graphics and stability. Well recommended.
http://www.nexusmods.com/oblivion/mods/47591/?

Following on from that I have added the recommended mods. Chose maskars overhaul rather than oscuros which I always used to use. Onto that lot I have added better cities, marts monster mod, and kvatch rebuilt and denocktoo (as I tend to play archer characters).
So pretty comprehensive, but I am looking for suggestions on what to add to this, mainly quest type mods, and creature/weapon mods, however will consider any suggestions. So please throw in your suggestions and I will try to look at each one, and post my final mod list once have run through a bit (to check for stability).

Lore Creatures (new creatures), Random Oblivion (balancing), Nehrim (total conversion, huge).

Cool, thanks for the lore creatures, will look into that, seems perfect for extra beasties.
The random oblivion, couldn't find on nexus, do you have a link. I assume this randomises the oblivion plane?
Nehrim, whilst and excellent mod, doesn't fit in here and not going for total overhauls, but more of an original games maxed out. Will look at a nehrim build when I have time as been ages since I played that also.

Any thoughts on alternative starts, there seems to be a few, this one looks promising:
http://www.nexusmods.com/oblivion/mods/11495/?

Well, Lore Creatures will be the only mod among the three I mentioned which fits your preferences, I'm afraid.
I mentioned Nehrim because I feel the great total conversions (especially for Morrowind and Oblivion, but there is also Enderal for Skyrim) are not widely known in these days, and Random Oblivion, because this mod changes the game as much as no other mod I know. It doesn't randomise the Oblivion plane, but the enemies you encounter, This mod makes travelling across Cyrodiil a creepy adventure, especially on lower levels. Very often you meet opponents you can't defeat, and have to run away from them (if you can). Not a mod for everyone's taste :-).
I have no idea how well this mod works when other mods changing creatures are there (Random Oblivion is one of the earliest Oblivion mods, more than 10 years old).
Here is a description from the readme:

"Welcome to reality, fear, and excitement. This mod completely changes the world of Cyrodiil. Now almost all NPCs and creatures are random levels, have random loot, weapons, and armor. And now most treasure is random, too. What this means is that when you start a new game, you must be very, very careful when adventuring. You could encounter any very low to very high level NPCs and monsters when you character is at ANY level. But, the rewards are much greater now. You can get very high level items early in the game if you are lucky. You will need these higher level items just to survive the game. Also, the arena is now a much more dangerous place. It is advised that you not go there until you are at a much higher level, because arena NPCs and their equipment is now random, too. The quest reward levels have also been randomized. You might get a great reward for completing an easy quest, or you might get an average reward for completing a tough quest. It is advised that lower level characters stay out of dungeons and other dangerous areas until leveling up a little bit. You may now buy any level weapon or item from any vendor regardless of your level. Also, any and all creature you encounter will be for the appropriate area in the game. I have not changed any creature locations, only the randomization of each creature level for the correct area of the game.
The reason why I did this mod is to help create a world of adventure, realism, suspense, and danger. The original Oblivion world adjusts to your character's level. But that's not like the real world, is it? It's always fun to go adventuring, and not knowing what may be lurking around the next corner. The thrill of being chased by several high level creatures that can snap your neck in two hits is quite exciting. A good (and safer) way to make money early in the game is to steal from people in the towns and sell the stuff for a profit. Also, pearl diving can yield different quality pearls at level one.
Please note that the ingame difficulty slider does work with this mod installed."

Back in 2006 I downloaded the mod from TES Source, but that site doesn't seem to exist anymore. I found one link for Random Oblivion 1.1: https://www.gamewatcher.com/mods/the-elder-scrolls-iv-oblivion-mod/random-oblivion-1-1-mod (I haven't tried the download myself). The latest version I have is 2.1 - the main difference being that 2.1 not only randomises opponents, but also loot, etc. If you want to find out how playing Random Oblivion feels, 1.1 is good enough.

I myself don't use any alternative starts. I have an end-of-sewers save game, where you can generate your character without going through the tutorial. If you want to play with different characters (and play Oblivion truly as a role-playing game), but are too lazy to use the class generator, there is the mod Revealed Classes (available from TESNexus), which adds many prefabricated classes, namely Commoner, Conjurer, Dark Mage, Farmer, Guard, Herald, Herder, Hunter, Merchant, Necromancer, Noble, Pauper, Pirate, Priest, Warlock, Witch.

I know many Oblivion mods changing the gameplay (especially older ones), but I don't think it makes sense to throw them all at you. If you are looking for something specific, I might be able to help you.
To be honest, the more I play Oblivion, the fewer mods I use (apart from bug fixes).

Ah ok. Yes, oscuro's overhaul does this as well, bit more hand placing than random, but for same ffec. It was hard installing the game without putting oscuro's on it, however maskars has been recommended several times so will give that a try this time. I tend to do every couple of years a final list of mods for that run (even tried danwoods compilation which wasn't very stable). Done this for all ES games over the years (those that have mods). I avoid the pre- built classes, choosing my own for build for power gaming or specific type of char. Interesting you use few mods, there are some I couldn't live without, denock arrow for instance is a must for archer characters.
To narrow it down, quest mods (got lost spire and I kvatch rebuilt), more creatures - oblivion always felt a bit copy and paste with not much in the way of enemies. Just trying to flesh it out a bit with more diversity - the main quest only takes a short time to complete and only the brotherhood quests are really much good other than that (oh, must look at the fighters guild extra quests - note to self).

Thanks for your input!

I do use unofficial patches, including, for example, the mages guild quest fix mod, etc. And I have two separate setups (both with SI): one for the base game and one for base game plus OOO (for the more challenging sessions).
I used to use many more mods in the past, for curiosity most of the time, but in the end I dropped most of them.
It's a matter of personal preferences. I like role-playing and I like exploring (there is so much to explore in Oblivion+SI!), I don't like fighting very much. For example, I experiment frequently with getting along without fighting at all (works quite well most of the time). To be honest, I never played an archer - perhaps I should give it a try.
For (relatively) quiet exploring I use a conjurer-type character with healing capabilities (making use of quick mana regeneration, one of the worst design bugs of Oblivion in my mind, but useful when you simply want to get around).
This means I let my conjured "companions" fight for me, lending a helping hand when it gets rough (several enhanced trolls, for example), or fighting takes too long for my taste (which happens sometimes in SI or in OOO games).
I have also played big quest mods like Aesgaard, Adash, and others, and I still have to make up my mind to have a look at Warcry- New Dimension, which is huge, sounds interesting, but I'm afraid takes too much time for me :-).

Cool, thanks. Will have to have a look at those three you mention, I did use warcry back in the day, it hadn't heard anything for a while.