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It seems like the early levels are extra hard in Oblivion. In Dungeon Siege, you just needed to avoid mobs of five or six until you got a few more skills, but in Oblivion it's hard to survive a one-on-one encounter a lot of the time. With enemy levelling, you can't just leave a fight until you level up a bit, because they're stronger when you go back!

On my first level-up I got two +5 increments due to careful choice of skill use, but it's too easy to use a Major in extremis and level up before you've rebalanced, so my second wasn't as beneficial. After that one, everyone I meet can kill me.

I may have to add the mod that Sharkull mentioned, or just move the difficulty down a notch or two for a while (and avoid the temptation to start making my own mods until I've played more).

I haven't done all the calculations, but it doesn't appear that a character can specialize to the extent one could in DS. A mage has to spend a lot of time swinging an axe or mace in heavy armor because they need points in those skills to get the level-up bonuses in things they need.