So it does not look as good as oblivion then?
I don't see how. When you make a mass multiplayer online game and want as large of a user base as possible and maximize the amount of profit, developing a game with oblivion'esque graphics would alienate quite a few potential customers who have lower spec'ed systems.
I currently do not know of any mass multiplayer online game that comes close to the raw details of normal single/multi player style games. Sure, there are a few out there that are pretty high end but not Obilivion high end.
Take a look at the most poplular ones available atm. WoW, Guild Wars and a few others can take advantage of high end systems but will run nicely on systems with specs as low as Pentium 3/4 and AMD Athlon T'Bird/XP chips and 64MB video cards.
... I guess developers have to cut corners when designing a MMORPG in order to reduce lag for most systems...
Thats most likely the case!