The world of Fallout is much more well-made than the world of Oblivion. It is a bit smaller, but that just cuts down on the useless time grind of hiking through mountains fighting bears to get to unknown locations. Playing fallout 3, you don't feel like any of the world map is extra space, the story is well-written and more mature than Oblivion, and the combat system is much better, as is weapon feel. The laser weapons don't seem like stupidly overpowered or fantastical things, the repair system for both your own health and your items works great, and the "pip boy" watch doubles as both a light and a mood-setting radio. That means no torch going out in caves, and that you don't compromise defense in order to see (like in oblivion when you have to drop a shield to hold a torch.) enemies are also better.
Fallout 3 also has a chainsaw and all kinds of execution kills with the various weapons. I suppose that might be a factor in your decision. Oblivion feels more like a T-rated game. Also, fallout's characters are more dynamic. You can easily kill many more of the story's characters than in oblivion. Only a handful cannot be randomly shot, closing some story paths to (possibly) open new ones.
That being said, Oblivion is longer. I never finished it, but I certainly clocked my 150+ hours (I never did the main quest). I've only played Fallout 3 for about 20 hours so far, but I like it more in almost every respect of the word.
EDIT: If you really want a fantasy game, get Oblivion. If you are impartial or lean at all in the other direction, go with Fallout. I mean, Oblivion is still really good. Fallout is just more real and modern. There are more variety in the things you can do, and the radiation and addiction systems are just a couple things oblivion doesn't have that make fallout moreunique and exciting. Oblivion feels much more like a single-player MMO, with dungeons and loot grinds and all that sort of thing, than fallout.
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