[llamabeast]

You should get one of the big mods, like OOO. They do a half-level-scaling thing. So a rat might scale with you up to level 5, then stop. A bandit might (say) be level 8 up until you're level 8, stick with your levels through to level 12, but never level any higher than that. I think it's a fairly clever compromise.

Oblivion's system is silly in a number of ways though. What some people do is set completely pointless things to be their Major Skills (Mercantile and so on), while building up the useful combat skills as minor skills. Since levelling only depends on the major skills, they can easily get to the end of the game as a level 1, and the monsters all the way through are pretty trivial to beat. Ridiculous!