I'm afraid Slush it most properly is your graphics card... Oblivion is reeally a hardware intensive. My old x1600 couldn't handle it properly sometimes on mid to high settings and even now my HD4850 craps out from time to time.... although this might be due to my sheer amount of mods... In any case you could try the Oldblivion mod, it significantly increases performance by decreasing the graphics quality drastically. And about the test buttons in DXDIAG, they aren't there in Vista, it's normal.