your card doesn't rank well at all (just go straight to the bottom):

http://www.gamespot.com/features/6147127/p-6.html

I have a 7600GT (mid level back then), and needed quite some tweaking to run it at decent quality and a smooth frame rate.

Fighting monsters is no fun in a slide show. The good news is that you can probably get a graphics card that will run it for under fifty dollars. Although you need to take a look at the rest of your system as well, since a decent CPU and enough RAM are important as well.

You can find out here: http://www.systemrequirementslab.com/referrer/srtest

If you're going to play it, read up on Oscuro's Oblivion Overhaul. One of the greatest mods (collection of mods really) for Oblivion, I wouldn't want to play it any other way anymore.