So, David wants to get into Cyrodiil, but isn't sure which mods to pick from the massive number on TESNexus?
Well, I was going to reply in a comment... but let's face it, this is me and the comment will quickly get too big for Blogger to allow it to be posted.
Instead, full post! Then I can yammer as much as I like; and people who don't read comments may well find a few new goodies, as well.
Oblivion Mod Manager is of course the starting point, same as in FO3. Don't forget you'll need the latest OBSE; as well as the Universal Silent Voice plugin for any mod that's dialog heavy but doesn't have voice files.
For mods themselves, I can only speak for myself, but...
*CM Partners is pretty much the companion system to get. It's what RR was originally based on, and while you won't find them to be as good as my work... CM is still head and shoulders above Companion Share and Recruit.
I can't recommend any specific companions really, since I use my own, but I have in the past used Trina and Kira, and Raizsha and Shantara to good effect. As they are Mazken and Aureal respectively, you have to have Shivering Isles to use them.
If you don't have SI, I don't have any specific recommendations; but a quick Nexus search will bring up literally hundreds of companions for you to choose from. Just remember, in Oblivion they call them Partners and not Companions for whatever reason.
*I would link Montana's Sexy Companion II for those not CM inclined... but it appears to have been pulled. Guess it got ripped off one too many times. Sad.
*Once companions are in the game, Francisco's Leveled Creatures and Items mod is my next stop. It resets the levels of most monsters so that they're fixed, rather than leveling with the player. Tired of running into level 46 bandits with Daedric armor and magic weapons? This is for you. Dungeons are now a set level, making wandering into a high level one rather dangerous. Also sets the Imperial Legion to a fixed level - since it's kind of silly that they would have a chance against the Champion of Cyrodiil if s/he decided to start some shit in town; though it also makes it a death sentence to start trouble at low levels. In addition, the level settings also make it nigh-impossible to finish out one of the guild questlines at low level.
The overhaul also changes the economy, resets respawn times, skill increases, and can add new monsters and items. Or not. The mod is a fully configurable install, use as much as or little as you like.
*The Imperial Waters isn't strictly speaking a must-have, but it adds some much needed class to the otherwise drab Imperial City.
*IMPEREAL is in the same category as the Imperial Waters - the game can run without it, but you won't want to once you try it.
*Natural Environments changes the environment, weather, general look and feel of the outdoors. I highly recommend the included HDR weather plugin; just make sure you've got a decent system.
*The HGEC body replacer is of course required for those of us who enjoy looking at the ladies. I also use Ozmo's High Rez Skin Textures. Very nice.
*COBL doesn't do an amazing amount on its own, but it's a basic framework used by many mods - house mods especially. Plus, "The Luggage" and its Summoning plugin are very handy.
*COBL, once installed, allows you to run A Better Benirus Manor, which is my favorite house mod currently in the game. It doesn't carry the neat items or servants or merchants of other houses, but it also doesn't feel gimmicky. It's a house, not a means to special equipment or free money.
*Apachii's Goddess Store and Heroes Store (for females and males, respectively) are great collections of items and weapons. They don't add these to random world inhabitants, though; it's strictly a go-buy-it-yourself proposition. Someone resembling me may need to change that. For bonus points on the cool scale, get the BBB enhancements for the Goddess Store, and the BBB Continued.
*As a guy who likes girls, I also have to recommend Colourwheel's excellent work, specifically: Sexy Female NPCs and Sexy Imperial Legion HGEC Extended. The Stock Clothing and Armor Replacer, and its SI Extension are both very nice, as well, if you're into such things.
So there you go. Not an inclusive list of the mods I run by any means, but this covers the basics, without getting heavily into personal taste only items.
I'd have listed a few more... but it turns out several of the mods I run have been pulled from the Nexus over the years. I guess not cleaning out my mods directory since 2007 has its advantages after all.