Well I always wanted a mod like this but the problem is I have no skill in modelling or adding content to oblivion, Anyway the mod idea is as follows: I'd love to have a cloak that removes the users head and leaves only air to make the character look like a Nazgul from The Lord of the Rings films and books. Also, If anyone was interested in this they might also be interested in adding a cloak to the game, a cloak combined with robes would look much better in my opinion.
there is an invisibility spell already in the game. If the construction set is anything like the one in morrowind, theres a way to create your own spells using existing effects, just modifying the magnatude and time. ill download the set in a few and get back to you if i can find it.