Royal, are you running with 84.21? I was playing for several hours last night at 1920x1200 with HDR on and didn't notice hardly any lag except at nighttime in an area with lots of flora. Needless to say, this game can be played well in high res with lots of goodies.
Yes, I'm using 84.21. I read a large thread over at oblivion boards saying ati is getting higher performance. This guy said that with his 7900GTX he's getting 30fps on average at 1600 x 1200 and can go a bit lower at certain times which is my case (sometimes it'll go 15fps). Dunno what specifically I have set that is causing the fps loss but hopefully the drivers will clear it up. If not, then Ill turn down some stuff and see if I can get better framerates.
I just encountered something weird. When I was playing, my computer froze and many of the oblivion textures turned blue. I had to force restart. Perhaps a bug. I doubt it's overheating since I have very good air cooling and I can play any other game for hours without this happening.