On second thought there buddy, I think there isn't a demo for it at least the one for pc version. I'm very sorry for saying to get the demo that turns out I can't find it. Do you have someone you know that might happen to own Oblivion? Anyways here's the requirements for the game.
Are you planning to upgrade your system? I would be a big help if you do so. With your current system the cpu is not enough to play the game with decent frame rates that is.
Oblivion IV: Elder Scrolls System Requirements
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-Minimum System Requirements:
* Windows XP
* 512MB System RAM
* 2 Ghz Intel Pentium 4 or equivalent processor
* 8x DVD-ROM Drive
* 4.6 GB free hard disk space
* DirectX 9.0c (included)
* 128MB Direct3D Compatible Video card and DirectX 9.0 compatible driver
* DirectX 8.1 Compatible Sound Card
* Keyboard, Mouse
-Recommended System Requirements:
* 3.0 Ghz Intel Pentium 4 or equivalent processor
* 1 GB System RAM
* ATI X800 series, Nvidia GeForce 6800 series, or higher video card
-Supported Video Card Chipsets:
ATI X1900 series
ATI X1800 series
ATI X1600 series
ATI X1300 series
ATI X850 series
ATI x800 series
ATI x700 series
ATI x600 series
ATI Radeon 9800 series
ATI Radeon 9700 series
ATI Radeon 9600 series
ATI Radeon 9500 series
NVIDIA Geforce 7800 series
NVIDIA GeForce 6800 series
NVIDIA GeForce 6600 series
NVIDIA GeForce 6200 series
NVIDIA GeForce FX series
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-Regardless of your video card, make sure to download the latest drivers from your manufacturer.