To be honest, I think Beth could take some hints from the more popular mods out there like Oscuro's or Francesco's mods. The first thing that has to go is the current levelling system used for both NPCs and creatures since it's way too annoying and unrealistic. After a point the player character is supposed to be the most uber in the land so goblins or bandits shouldn't be giving him too much trouble. The daedric-wearing bandits are also stupid and unrealistic. These men are supposed to be cutthroats and outlaws living the way they do because they have no other choice. If they were to simply sell their high quality armour they could live off the winings for the rest of their lives.
Secondly, Oblivion is too stale and bland when it comes to atmosphere in towns. Especially taverns. I mean, entering an Oblivion tavern reminds me of a modern day library. I can almost see a "Keep your voice down" sign hanging over the bar. Besides the random conversation about mudcrabs between two NPCs there isn't much noise. Oblivion could take an example from the Witcher in these areas. Add drunkards, singing bands and rowdy people ready to get in a brawl with you. The ability to actually get drunk is also quite important if you really want to have a proper tavern-going character. Being able to play tavern games like dice or cards would also add to the atmosphere considerably. The cities should also be more realistic and lived-in. I mean the cities are too clean when they should be dirtier and less happy. Adding a few generic NPCs simply for making the cities seem more believable seems like a good goal if you ask me. Also, another thing which I found extremely interesting in The Witcher was the fact that cities actually got dangerous at night. Fanatics started walking the streets and attacking nonhumans at random. If they saw me get near they would also attack me. Adding something of the like in the more shadier parts of cities in Oblivion would be great, I say. It would generally give you a feeling of dread to walk the streets at night in the more dangerous parts of town like the slums. Of course, being part of a guild like the Thieves Guild could make you well-known enough that minor thugs leave you alone but being part of a guild should also create new enemies. Thus, members of a street gang which challenge the Thieves Guild could begin attacking you on sight just for being a member.
I'm sure you all have thoughts which could help the game so spew them out without any fear. On the internet, no one can hear you scream afterall.
