It can get alittle complicated in parts. Some very large mods will alter many different aspects of oblivion, and smaller mods may only impact one of two things. If these objects, textures, entities, etc collide there will be a conflict. Though it's not as bad as it sounds, a load order is needed in this situation. say you have frans and a smaller mod that conflicts with frans. You want the smaller mods effect over the effect frans utilizes for that object, texture, whatever. you put the esp/esm that you want underneath that load order and it will safely over right the the sole file it conflicts with.
It can get complicated when two large mods are incompatible, i had this problem with TNR and fran. TNR changes every single resident of Cyrodiil, to a hand crafted version, it makes for a handsomer (in most cases, the khajiit look more like housecats, and they're butt ugly XD) and more believable world, in my opinion at least, the mod team spent thousands of hours doing this, counts for alot. back on subject, it is incompatible with frans, OOO, MMM, and several other big mods. I had to use a program called wyre bash to merge TNR on top of francesco's, using a bashed patch. It's not hard, they give instructions, but yeah, it can get complicated. A way around most big conflicts like this is to simply get one mod for a certain thing, like I said I have over 3 dozen and only a couple conflicts, most easily solved by using the load order to get the effect i desire.