Tweakguides can help you figure out what to enable/disable, as well as offer some useful mods to make the game look better.
As everyone is telling you, with that card, and at 1280x1024, you can run HDR and FSAA at the same time. This is not possible with the GF7 series like the 7900GTX. Enable HDR within the game, and force FSAA in the NV drivers. You will also want to enable AF in the drivers as there is no AF setting within Oblivion and to me that makes a big difference to the IQ of this game.
My suggesttion for starters is set everything to max within the game except turn off self shadows. Personally I also turn off shadows on grass and set shadow filtering to low and if you need a bit more performance, that's where I would start. Exit the game and then force 4XAA and 16XAF in the NV drivers before starting the game again. I'd expect your card to handle those settings as that is what I am using with mine at 1680x1050 but I had to turn down FSAA to 2X. You have to judge smoothness vs IQ and tweak accordingly to your taste.
Anyway, from within the game you can enable the console by hittin the ~ key and typing TDT then hit enter. It will bring up the framerates in the top right of the screen. If you are new to Oblivion, then it will take a while before you hit the demanding areas of the game that stress you 8800GTS. So keep that in mind that 100 fps underground could end up being 20 fps outside in dense foliage. Seeing the framerates can distract from the game, but it's a good way to check or get an understanding of why the game may feel slow. Too low fps while in a battle and you will feel it.
Enjoy the game; you have a nice rig for it. I am new to the ES series, but have totally been enjoying both benching and playing Oblivion.