I don't know the prices you'll be paying, but an opteron 165 is the same as a 4000+ for me and would be a much better buy if you don't mind overclocking a bit. You keep the 1meg cache and add another core. You could probably get the 2.4GHz (which the 4000+ has) out of the 165 on air.
I've found Oblivion doesn't use much RAM at all, even when I tweak the .ini to let it know there's 2 gigs there. So you'll be fine with the 1 gig, just don't play BF2!
I've since started playing Oblivion again, I've just learned to save with new saves very often. The PC version is better due to the console commands , that actually just got me unstuck from inside a boulder last night, and 3d party patches. But my 7800GTX plays it fine with full settings@1280x1024, that 1900XTX should handle Oblivion and then some. There are so many user patches out already, many are for textures, others are for weapons.. one let's ATI cards run both HDR and AA...must be nice!
Oh yes, and Bethesda has said a patch is already in the works
