Reinstalling Oblivion

I've decided to reinstall Oblivion. I remember having to tweak the settings quite a lot to get it running at its best on my old PC with its 7800GT. However I don't think it will be needed on my current PC with 4870. I'm thinking the graphics settings should easily run maxxed out.

I also never tried out the Shivering Isles Exp originally so want to give that a try.

The question is, what are the best mods to install for Oblivion these days?

I've got a collection of the official small Oblivion expansions too such as Knights of the Nine, and while I did try them all out originally, I want to install and play through them again.

I know there are some mods that alter the game to make it better balanced, removing the level matching of enemies, making levelling up more worthwhile. But what is the best mod for this?

And what other mods and tweaks would anyone recommend?

Also, what is the current version of Oblivion? What patches do I need to find?