IMO here are your main options. From cheapest to most expensive.
Geforce 6600GT - $120 - To have a good experience with Oblivion performance wise, this is probably about the minimum you should have. Will run on solid medium settings...which still look good.
Geforce 7600GS - $140 - Will most likely run on solid high settings, a few things maxed out, a few at "medium" settings. Not bad.
Radeon x850xt - $170 - Will run Oblivion very well at solid high settings, a lot of stuff maxed out. The only catch is you won't be able to turn on HDR in Oblivion since the x850xt does not have shader model 3.0. The rest of the cards in this "lineup" do have shader model 3.0, although it would probably be best for performance if the 6600GT didn't enable HDR.
Geforce 7600GT - $185 - Will run Oblivion very well, similar to the Radeon x850xt, except you WILL be able to turn on HDR as well. A GREAT card for the money.
I would have included the Geforce 6800GS in this list, but figured the point was moot, since as of right now...the 7600GT is cheaper AND better. And of course, I left some cards out, especially from the ATI side of things, but IMO Nvidia is the way to go in the $120-$200 price range for best price/performance ratio...reason being a lot of the otherwise decently cheap ATI cards do NOT have shader 3.0.