I would have to saw I have never seen such increable geo-architecture as in Gothic series PB are masters of this among other things.
I would disagree oblivion is gorgous out of the box, as a matter of fact even the water looks crappy though it's been many months since I ahve played it I can't think of a single area that didn't need to be modded in oblivion.
As an example the characters in Bloodlines looked much better until they are modded and this maybe have something to do with how well expressions, emotions and facial feature were handled, iirc.
Also it's been awhile but Far Cry did architecture better, plus the vegetation and forest were better done, than oblivion though they weren't as updated obviously with things like speedtree, at least irc atm.
Half-Life 2 and FEAR had much better looking character skins as well.
As a matter of fact I can't think of anything in out-of-the box oblivion which was better than any of these other titles and this includes G3.
The main thing I think many forget and this includes some reviewers is G3 has been broken for the most part and the vast majority include mods when accessing oblivion against other titles which it not a rational thing to do.