Oblivion performance

Depends on what you mean by low. Oblivion is a demanding game especially with the bloom and view distance on high. With that setup/settings I would expect some drops below 30fps. I ran 2x8800GTS OC'ed to 650/1000 with an e8400 and averaged about 40fps.

also what does the fade option do effect wise? and does it effect performance?

I should think inside you would be getting 60+fps easily at all times. Shouldn't make a difference under Vista provided your video and chipset drivers are updated. The fade option determines at what distance objects(trees, grass people etc) fade from view. This is another option that only goes into affect outdoors. What motherboard are you using?

my video card is a 512MB PCIe(TM) x16 NVIDIA(R) GeForce(R) 9800 will oblivion run on this???

"well it was in the dungen bit which should have no issuses with draw distance its the bit were the king gets ambushed right a the begining i had about 25fps"

I had the same problem and I have a 9800 gt. The solution was to dl the unofficial oblivion fan made patch:
http://planetelderscrolls.gamespy. [...] il&id=1417

but it till runs pretty slow in some outside areas. A lot slower than the better looking imo stalker game,

I recently installed the game I've got Phenom 9500, 9800 GT, 8GB DDR2 800 on Vista 64. I run the game at 1920x1080p with all the settings on high. I have some sliders maxed (grass, view distance) and some sliders 3/4ths the way up (lights, shadows, object, actor, etc). I did install the high resolution distant land mod. The game run for the most part 30+ FPS outdoors.

If you max everything including shadow distance and specular distance then your system is going to drop frames outdoors and in cities.