What kind of graphics hardware are you using?
Without knowing that, All I can suggest is upgrading Graphics Drivers.
2 processors running - AMD Turion(tm) 64 X2 Mobile Technology TL-60
2.00 GHz Performance Rated at 4.19 GHz
System RAM 3.9 GB
Microsoft Windows Vista Home Premium Edition, 64-bit
ATI Radeon X1270 (ATI Radeon X1200 Series (0x791F))
DVD HL-DT-ST DVDRAM GSA-T20F ATA Device
Thats his specs >_>
I think I'm running the same laptop. Gateway?
And yeah, that makes it a lot harder to upgrade his Graphics Drivers. You could run the catalyst drivers for the x1200 series, but it won't be specific for your card.
You should be able to play under mid-low settings.
As far as the crashing, uninstall, reinstall, update to newest version, with Vista support upgrades, and 64x support. (I'm not totally 100% about this, but I think the latest update adds support for that...) And install the shivering Isles.
You also might want to consider a No-CD. (Gamecopyworld.com)
Oblivion is one of the few games I've played that crashed
less with a No-CD