With respect to the stuttering you're experiencing, Paddy, I think it might be something to do with Dual Core CPUs... my box is perfect on Oblivion, and while it's not exactly a pile of crap, it's not
quite up there with yours. Close though. ;)
As for the distance looking crap, go into the ini file and change a couple of settings... they don't impact performance too greatly on my box, but make the game a whole lot smoother...
These are taken and adapted from Atomic PC Australia's Oblivion Tweaking Guide. Google for it if you want. I'm leaving out things I didn't use, or found to be more of a hindrance than a help. Load times are increased with some of these options...
Code:
fDecalLifetime=1000.0000 (default 10)
iMaxDecalsPerFrame=400 (default 10)
uGridsToLoad = 9 (default 5)
uExterior Cell Buffer=100 (default 36)
iPreloadSizeLimit=104857600 (default 2621440)
bUseWaterReflectionsMisc=1 (default 0)
bUseWaterReflectionsStatics=1 (default 0)
bUseWaterReflectionsTrees=1 (default 0)
bUseWaterReflectionsActors=1 (default 0)
uSurfaceFPS=15 (default 12)
bForceFullLOD=1 (default 0)
iMinGrassSize=130 (default 80)
fGrassEndDistance=9000.0000 (default whatever you set in game)
fGrassStartFadeDistance=8000.0000 (default whatever you set in game)
Allow30Shaders=1 (default 0)
The DecalLifetime and MaxDecalsPerFrame control how much blood etc is left before it vanishes. GridsToLoad and Exterior Cell Buffer mean that the distance looks
miles better. PreloadSizeLimit increases the amount preloaded into memory during the first load (from the menu) - it increases load times dramatically if you set it too high. WaterReflections etc improve the look of the water. ForceFullLOD increases how good trees look. MinGrassSize increases performance by not loading the 'tiny' grass textures... it doesn't drop the quality much, and can improve framerate a shedload. Grass...Distance helps stop the 'popup' grass. Allow30Shaders turns on Pixel Shader 3.0 support. Improves performance a little with no drop in quality.
These are the ones I've tweaked, and that improve the look or the performance for me. Each system is different, though, so mileage my vary. ;)