The lights are on
Oblivion has a really active mod community (better than Fallout 3's, in my opinion), and it can really add to the longevity of your game. PlanetElderScrolls is by far the best site to download mods from. Some of my favorites are the UI mods, colored world maps, and the Mystic Elf custom race.
If anyone else has mods they would like to share lets hear it!
Hmm as far as I know its not possible to mod the console versions of Oblivion. I have the 360 version as well, but I play it on the PC so that I can mod the awful UI and journal/menus.
Nope, not possible to legally mod the console versions of the game.
I get most of my mods off of TESNexus (for OB), Planet Elder Scrolls mirrors a bunch, but I get most of my Morrowind mods from that site.
Some recommendations: OOO, if you want a big overhaul. Pair it with Martigen's Monster Mod and you have a new, and much more difficult game. It's a blast, but the low levels are tough to survive.
Quest mods: The Lost Spires was amazing. I am currently using The Ayleid Steps, which is really excellent as well. There are, more lately, some really good quest mods coming out. Verona House: Bloodlines - very cool, but does not kick in until after the MQ is completed.
Some simple mods: Bag of Holding, Ayleid Loot Extended, lots of house mods
I have used a lot of different mods over time... and I wouldn't use any of them without using Oblivion Mod Manager and/or Wrye Bash, both great utilities.