Morrowind vs. Oblivion
While there were many significant changes between Daggerfall and Morrowind, experienced players of Morrowind will hopefully not find too many unpleasant surprises in the gameplay. Like Morrowind, character creation is integrated into the game itself. Character advancement is still based upon how you develop the skills you choose during character creation. While the skills themselves have changed a bit (considerably, if you're comparing them to Daggerfall), they are still grouped into Combat, Magic and Stealth categories. Items will still deteriorate with use and require repair or replacement. Merchants carry only a limited selection of goods and have a limited amount of money with which to purchase your loot, and so forth.
As with Morrowind, the most immediately obvious changes are in the graphics. Oblivion is one of the most lushly graphic games currently on the market and, as such, requires some hefty graphics hardware if you're playing on the PC (per Todd, if you're playing on the XBox 360 and want to be really dazzled, do it on HDTV). My top-of-the line nVidia graphics card of a couple years ago barely meets the minimum requirements for today, so I ended up replacing it (wise choice for playing the game, poor choice for the bank account). A current mid-range machine should be sufficient, although you probably won't be getting the greatest framerates in the world. Console gamers will have to content themselves with an XBox 360 (oh, boo-hoo) as there are no announced plans to port the game to other console systems. But in any event, be prepared to be completely blown away by the graphic quality and detail.
My original machine specs: Athlon XP 2700+ clocked down to 2100+ (1.73 GHz), GeForce 5900FX, 1 GB DDR, standard integrated sound. With these specs I could not watch the opening cinematics (I'm told that enabling AGP FastWrite in both BIOS and display settings will resolve most of this problem), interiors with lots of light flickering (torches, fireplaces, etc.) had extremely poor framerates (very jerky and stuttery on top of it), exterior view distances were terrible and a lot of vegetation did not render at all, but the game did run and I was able to complete the Tutorial dungeon, do a few miscellaneous dungeon explorations, and complete most of the recommendations quests for the Mages Guild. To fix the framerate and poor graphics problems, I upgraded to a 7800GS, slapped in another gig of RAM and then tweaked the BIOS and display settings to accomodate the new graphics horsepower. Performance is hugely better, graphics are great and the game runs quite smoothly. Your mileage may (and probably will) vary. With the high-end graphics horsepower necessary to run each new game, I'm beginning to wonder whether Bethesda doesn't have some sort of kickback deal going with nVidia and ATI. Probably not, but that's the lovely part of conspiracy theories: the lack of evidence is proof of how deep the conspiracy really goes.
Training has been reworked. Up until this point, you could train any skill up to the level of its governing attribute. With Oblivion, you can only train five times per level and are still capped at the governing attribute. This makes having wads of cash a bit less important and skill choices much more critical. Power-gamers are going to really have to play the numbers game with Oblivion. As Bethesda got a very noisy hue and cry over skill changes in Morrowind and quickly fixed it, I'm hoping that they will do something with this, too.
The good folks at Bethesda did a complete reworking of the game, including the magic system, especially as it affects your skill development in the six schools of magic. In Daggerfall, you could hole up in a tavern room and cast spells at nothing, with each spell-casting adding to your skill in that school. In Morrowind, your spells did not automatically fire, so you only got skill improvements from spells that actually went off. Nevertheless, you could stand out in the wilderness and blast trees and rocks with cheapie practice spells to improve your skills. In Oblivion, your spells have to actually affect something before you see a skill increase. This is not a big deal for Illusion, Conjuration, Alteration, Restoration and Mysticism, but you're going to have to be a real masochist if you want to fry something without getting charged with assault (frying yourself DOES work). Along with this, a couple of my favorite spell effects have gone the way of the dodo - Mark/Recall and Levitation are extinct. Although it is possible that some kind modder will replace them (I'm not quite sure how one would replace Levitation through a mod, but all things are possible in an infinite universe), but in any event, the release version of the game does not have them. You can get a quasi-Levitate effect by opening the console and toggling collision off (hit the tilde key, type "tcl", press <enter> and hit the tilde key again). When you get where you're going, repeat the process.
Speaking of modders, the Elder Scrolls Construction Set is again available to the fan community. Unlike Morrowind, however, Oblivion's Construction Set will not be included on a CD with the game (which will be on DVD, by the way). Instead it is available as a download from Bethesda's website. At about 6.5MB, it's not a terribly big download, so even those on dial-up shouldn't have too many problems getting it. Todd Howard and Pete Hines, in interviews done during the week or two prior to the game's relase, said that the Construction Set would be available a couple of days before the release of the game and they were hoping for some official mod content to be available on the day of the game's release. This did not actually happen as planned. The CS was available on March 20 (official release date was the 21st) and there was no official expansion content available as of the 24th. The CS in Oblivion works pretty much like it did on Morrowind, so Morrowind modders won't have much of a learning curve.