Can i play oblivion efficiently?

CPU should be fine, RAM definately OK, but I think you're going to stuggle on the GPU. You MIGHT be able to get it to run at low settings, but I think you've got a high probability of jerk-o-vision.

What card to upgrade to will ultimately depend on your budget. Decide what you can afford and then check the Tom's VGA charts to pick the card(s) with best bang/buck ratio in your price range.

game plays on a 6800 GS on High 1280x1078 or whatever the resolution of 19inch monitors are. However, it gets a little choppy now and then (especially in the grass) im thinking of stepping up to a 7900GT for longevity and to enjoy the game to its full potential. So in short, 6800 GS works (costs like 150) and you average 25 - 30 fps. 7900gt should allow it to be playable at max settings with even better fps (costs 300)...

Just bought a 6600, it works great, im having no problems with it whatsoever. How much memory did your 6800 have?

Your video card will explode the during the Oblivion install.

Good thing you got a new card; I've heard reports that it's impossible to play with a GeForce FX card. Aside from that, you're great.

In many areas, Oblivion is CPU-limited; in the wilderness, with all in-game settings maxed, I get a constant 60fps with my X800XT. That dips to 30-35fps in towns, due to the excessive AI usage.

Will run smoothly on 800X600. Don't worry; it's still looking good at that resolution. And the game sure is fun... 

My 6800 gs has 256 megs of ddr3 ram. THe game detected me on high at 1024, but im choosing it to run at 1280 cus thats my screens native resolution I run with vsync on (my friend says that he took it off, gets higher fps, but notices a little screen tearing here and there)

Like i said, the game is playable...but there are some noticeable framerate drops.

I have a dual core processer so i think i have all that covered.

I am not complaining about my card (it performs in all other games), but im saying that at these current settings, my card is being maxed out pretty much... in towns my fps are around ~20, dungeons ~30...and it gets kinda choppy when im surrounded by grass.

im running HDR as well...visually the game looks great, im just sacrificing some performance to do so

Thats what I needed to know as I have a 6600gt installed with similar specs to you although its a AMD64 3000 that I have with two gig of good ram.

Gosh this game is getting rave reviews.

I'm running Oblivion with a 6800 GS too and the auto detect picked it up as high but I wanted to see what it would look like with 4X Anti-aliasing on and it's SWEET!! (A bit laggy though...) I'll try putting it down to 2X to improve how fluid it is but it looks amazing, especially the water ripples...

Athlon X2 3800+
1Gb Corsair Dual Channel 400 DDR
X-Finity 500W SLI psu
250 Gb Sata2 16mb
A8N-SLI
XFX 6800 GS

your GPU will have a definate problem so what I think you should do is buy a new one and a new processor. Your processor is fine though I just like AMD for gaming.