If you build it yourself...you might be able to save a bit of money (perhaps a lot if you really take the time to follow the deals while making sure each piece of hardware is compatible with each other. i.e. Power supply vs videocard. etc.
In a nut shell...you could go for a 7800 series or if you really want to max all mods, etc...then a 8800GT or equivalent with ATI for cheaper. Get a dualcore AMD processor rather than an Interl (again cheaper) with similar performance.
Oblivion is aging and I wouldn't be surprised to see this game shine with a 7800GTX thou you might want to compare prices...go for 8800gt if prices are similar. As for the processor, you don't need to get a recent one but I would look online to see how much processing power Oblivion requires (which is higher than most would anticipate). You can make your decision from there. Get a good PSU...and you won't need more than 1 G of Ram...thou 2 would be better.