To Patch or Not?
The game code was pretty clean at the time of Oblivion's release, especially in comparison to other Elder Scrolls games. But there were still issues after the game's release. Four come immediately to mind:
A lot of the other problems seemed to center around people trying to run the game on sub-spec machines and there isn't much that a patch can do to resolve this issue.
One sneaky issue that Bethesda resolved with the patch was to reskin the female torsos to eliminate the nipples that they had left in the game at the time of its release. Why this was done is an issue best understood by politicians and the folks at the ESRB, but suspect it was two-fold: preserving Oblivion's ESRB rating and wiping the egg off of their face after the "no nudity" promises failed to pan out.
The patch went through a fairly extensive beta-testing period before it was released to the public. During this period, the issues that the patch would address were identified and various solutions were tried, eventually resulting in an official patch for the English-language version of the game followed by foreign language versions shortly thereafter.
From my perspective, the only issue that I was experiencing was the crash-on-exit problem. As I mentioned at the start, this issue was not resolved by the patch, at least on my system. While annoying, this was hardly a game-ruining problem. Most of the major scripting issues were resolved in an "Unofficial Patch" mod and my graphics problems were resolved when I bought a better graphics card. I figured I was going to have to do that, anyway, but went ahead and bought the game and kept my fingers crossed. The game actually worked well, but graphics performance was very sub-par.
I installed the patch more out of curiosity than any real need to fix things and found that it created a few problems. The reskinning of the female torsos was a surprise, not a real problem. One problem created by the patch was that the game now fails to mark some conversation threads as "used", so they still show as "new" or "unused," which results in a lot of repeated conversations. This, for me, is a truly annoying issue and is almost worth the hassle of uninstalling and reinstalling the game just to get rid of it.
So my advice is to not patch the game initially. Instead, find and install the Unofficial Patch mod to resolve the scripting issues. Then play for a while to see how things work for you. If you run into unbearable problems, patch. If not, leave it alone.