Thanks for the quick response, but I managed to sort out the problem; I played around with the settings and now the gameplay is working as it should, but now the grassland has a purple like colour, which it never had before, when it should look like normal grass, and this is everywhere throughout the Oblivion world.
My specs are:
Processor: AMD Athlon(tm) II X2 215 Processor (2 CPUs), ~2.7GHz Memory: 3072MB RAM Hard Drive: 242 GB Video Card: NVIDIA GeForce 9200 Operating System: Windows 7 Home Premium 64-bit (6.1, Build 7600) (7600.win7_rtm.090713-1255)