Here's the DL for oldblivion to run with patch 1.2. Just download and install the patch, then extract this file.
After extracting to desired folder, run as you would normal oldblivion. Just run oldblivion.exe.

Detailed Instructions (thanks to Jenifur Charne):

Preparation work:
01. download Cobra Venom's .INI and texture/mesh fixes.  Some of the texture and mesh fixes archives by COBRA_VENOM do not have readme files.
Nirnroot_Fix; Xeddefen_Fix; Felldew_Fix, are all missing readme files.
Use the readme files in Water_Fix and/or MagicEffects_Fix.
02. download Unofficial Oblivion Patch for v1.1, v1.2, DLC, KotN, and SI
03. download Oldblivion 0.11t7 installer.
04. download Zeroed's Oldblivion for 1.2
05. create a temp directory for working.
06. unarchive Cobra Venom's .INI to the temp dir.
07. unarchive Cobra Venom's texture/mesh fixes to the temp directory keeping the directory structure in the archives intact.
08. unarchive Zeroed's Oldblivion for 1.2 to the temp dir keeping the directory structure in the archive intact.

Install sequence for Oblivion non-GOTY
01. install Oblivion
02. install Oblivion v1.1.511 official patch
03. install DLC
04. install KotN
05. install Oldblivion 0.11t7
06. option a (without SI). install Oblivion v1.2 Official patch
06. option b (with SI) part 1. install SI
06. option b (with SI) part 2. install SI v1.2 Official patch
07. copy Zeroed's Oldblivion for 1.2 from the temp directory to where you installed Oldblivion. OVERWRITE existing files.
08. install Unofficial Oblivion Patch for v1.2
09. install Unofficial Oblivion Patch for DLC if you used steps 03 and/or 04.
10. install Unofficial Oblivion Patch for SI only if you used step 06 option b.
11. *Optional Construction Set steps done here. See below.*
12. copy the 'DATA' directories from Cobra Venom's texture/mesh fixes from the temp directory to where you installed Oblivion. OVERWRITE existing files.
13. make a backup copy of c:\Documents and settings\<user name>\My Documents\My Games\Oblivion\Oblivion.ini in the directory the Oblivion.ini file is in.
14. copy Cobra Venom's .INI from the temp dir to c:\Documents and settings\<user name>\My Documents\My Games\Oblivion\Oblivion.ini . OVERWRITE existing file.
15. run game.

Optional and *MUST* be done before main install step 12:
01. download TES Construction Set for Oblivion 1.2
03. download BSA Commander
04. unarchive BSA Commander to temp dir
05. install TES Construction Set for Oblivion 1.2
06. copy your original .BSA files from Oblivion\Data to where you unpacked BSA Commander.
07. use BSA Commander to unpack all the data in the .BSA files.
08. copy the unpacked data to your Oblivion\Data directory.
It's the last step in this optional sequence that is why it has to be done before step 12 of the main sequence.
Step 12 in the main sequence will overwrite some of the data files unpacked from the .BSA files.

Install sequence for Oblivion GOTY
01. install Oblivion
02. install DLC
03. install Oldblivion 0.11t7
04. copy Zeroed's Oldblivion for 1.2 from the temp directory to where you installed Oldblivion. OVERWRITE existing files.
05. install Unofficial Oblivion Patch for v1.2
06. install Unofficial Oblivion Patch for DLC.
07. install Unofficial Oblivion Patch for SI.
08. copy the 'DATA' directories from Cobra Venom's texture/mesh fixes from the temp directory to where you installed Oblivion. OVERWRITE existing files.
09. make a backup copy of c:\Documents and settings\<user name>\My Documents\My Games\Oblivion\Oblivion.ini in the directory the Oblivion.ini file is in.
10. copy Cobra Venom's .INI from the temp dir to c:\Documents and settings\<user name>\My Documents\My Games\Oblivion\Oblivion.ini . OVERWRITE existing file.
11. run game.

DLC and which Official Patch it works with:
1.0
DLC1 Horse Armor
DLC2 Orrery
DLC3 Wizard's Tower
DLC7 Thieves Den

1.1.511
DLC4 Spell Tomes
DLC5 Vile Lair
DLC6 Fighters Stronghold
DLC8 KotN
DLC9 Mehrunes Razor

URLs:
Official Oblivion patches: http://www.elderscrolls.com/downloads/updates_patches.htm
DLC: http://obliviondownloads.com/StoreCatalog_ProductList.aspx?SubCategoryId=1
Zeroed's testing version of Oldvlivion for 1.2: http://www.oldblivion.com/sm/index.php?topic=4556.msg54113#msg54113
Cobra Venom's stuff: http://www.oldblivion.com/sm/index.php?topic=5105.0
Unofficial Oblivion Patch.
http://planetelderscrolls.gamespy.com/View.php?view=OblivionMods.Detail&id=1417
Unofficial Official Mods Patch v11
http://planetelderscrolls.gamespy.com/View.php?view=OblivionMods.Detail&id=2384
Unofficial SI Patch v1.2.0
http://planetelderscrolls.gamespy.com/View.php?view=OblivionMods.Detail&id=2754
BSA Commander: http://letalka.sourceforge.net/morr/index.htm

Useful links:
1.2 Fixes and Files by COBRA VENOM
Update on oldblivion for 1.2