Will I run Oblivion

Check the recommended spec on the box/website of the game. You should probably be able to run it with 1Gb of RAM, but if you're planning no running at quite high settings (as you probably would expect with a 7900) then 2Gb is probably a good idea.

If you're so keen to play the game that you're happy to upgrade to play it, then buy the game (when it's released) and test it. If it's too slow, then order some more RAM. You can order it next-day delivery if you need an instant fix

Provided that your system is "clean," it will run astoundingly well. If it's not, then it will run like crap no matter what you do.

Yea get 2Gb now.

Get "dual channel" memory. Make sure the motherboard you get supports dual channel memory. Dual channel memory adds about 10% more speed than just two regular sticks of memory.

You will find that dual channel memory comes in "kits", in your case two matched 1Gb sticks. You should also get them with heat spreaders while your at it.

As allways make sure you have your computer set up right and tweaked by going to Tweakguides.com. He has a nice tweak guide for general computer tweaks. Site might be down while he moves to a faster server so check again later if it's not up.

There are plenty of tweaks for Oblivion in the Oblivion Tech Help fourm and he is makeing an Oblivion tweak guide with all the tips and .ini tweaks.