Hmm, I have a not so common problem. Everytime I come across and kill some creature my Oblivion freezes for 1-2 seconds. I've googled for the right answer and did all the stuff people were talking about.
1. Reinstalled/updated all my codecs
2. Changed Oblivion.ini file (that worked but I don't have sound in my game )
3. Updated my audio drivers
4. Changed in Oblivion.ini file fMaxFootstepDistance to 0
I know what most of you guys are thinking. I DO NOT HAVE A TRASHY COMPUTER and it ran great on my Windows XP, but now it's lagging on Windows 7 Ultimate.
Please, but please, if you know the solution to this problem reply as soon as posibble.
Sounds like a sound issue --- each time a battle starts\stops the music changes and many onboard sound cards cause slow downs when it happens - try going into the oblivion.ini file and disable the music ( bmusicenabled=0) just to test if that is indeed the problem) - If that fixes things then you know it is a sound issue and can look into either updating the drivers for your sound chip or getting a dedicated soundcard that has hardware acceleration.