@ sweetpete:
I think only Bethesda can answer that question, and she hasn't said anything yet.
To your second question: Level 1.
Nope, I'm not kidding you. In Oblivion, almost everything levels with you. The higher you get, the tougher your opponents will be.
Sneaking and some almost instant death traps (rock slides, drop into lava) are the only exceptions.
So as long as you keep a steady supply of, or bring sufficient healing potions , you can finish the main quest at level 1. Just keep a silver weapon (free from Mage/Fighter guild halls) to hit normal weapon immunes and you'll be fine.
Also the lower level you are, the stronger your NPC allies will be. This is because their gears don't level up... so at higher levels they are severely disadvantaged. At level 1 they will survive 10 enemies (mostly scamps) without you healing them, and at level 20, facing top-level daedra they won't last beyond the first minute.
My first character (Imperial Knight) didn't start the MQ until level 18. At around level 23, you face pretty much the same daedra everytime - and while I can kill them just fine, it takes a lot of time - the mage types will keep running away (for miles if you let them), the little spiderlings will paralyze you, you get knocked flying no matter how much agility you have, etc.
My second character did the main quest at around level 10 - 15, and that feels MUCH better.
If you die a lot, perhaps you need to learn how to fight. The combat system is not like Morrowind - you have to use skill and tactics now. Back in Morrowind you just keep dash in, swing, dash out, and you will kill everything. Not in Oblivion. Go to the Arena in Imperial City, save your game and use it to train.
Use a shield - blocking with shield is MUCH more efficient than with weapons. Keep an eye on your opponent at all times - observe him, see when he's going to attack, and block / back up. If you get knocked back a bit - don't panic, steady yourself, move away from him, and try again. If you find him stunted from your block, move forward and do a normal attack. A few normal attacks if you're using fast weapons like daggers and swords. Then back away.
Also keep moving. Find shelter if you're fighting archers. Close in quickly against mages, as most of them can't take more than a few hits. Use medium distance as one of your defense against swords, daggers and hammers.
Keep observing and try to time when to block and when to attack. When you get better at the timing and distance calculation, start using power attacks. You don't want to miss... or get blocked. You will be stunted/locked and you will get punished.
The above still applies even if you're a magic user. A magic user can use shields too.

Keep a dagger in case you run out of magicka, and use touch spells - much more magicka friendly than target spells, plus you are much less likely to miss and waste magicka.
Try the arena - that's where I learn to fight.
