Great graphics, great gameplay, great everything - but better than Morrowind? I'm not sure...
Fundamentally, it felt dumbed down and arcade-y to play Oblivion on the 360. Inventory management became a game of scrolling through endless lists with the right thumbstick "mouse"; you could only set one marker at a time (minus my old mainstay, notes); each quest automatically spawned a location marker for you, so you didn't even have to pay attention to the verbal cues from NPCs, anyway.
(BTW - they removed levitation? -- Why?! And Oblivion is the only game so far to lock up my 360... repeatedly... )
However, let's not forget all of the positive things: it's absolutely amazing to see a procedurally generated world in hi-def, the voice acting is pretty good (although too many of the same actors are re-used throughout the game), and having characters react specifically to your gender and species is a nice touch.
Somehow, Oblivion made me yearn to pop in my old copy of Morrowind and play through Tribunal or Bloodmoon. Who knows? -- maybe I'll give my 360 copy of Oblivion to a friend, and pick up a PC version, just to see if I can find that old spark again...