According to this post
the official Oblivion message board the real reason behind the Oblivion
delay was "The game just wasn't done". I have to say it's nice to see
honesty from the developer as well as a developer holding back a game
because it's not ready yet (*cough* EA *cough*). Sure I'm
frustrated that I won't get my hands on the game until around
Valentine's day next year but hopefully the wait will be worth it.
Thanks to Evil Avatar
for the link.