it should run it, but badly , I have played it on a 6600 GT 128 which is slightly faster and had to play it on min settnigs to get good playable FPS.
Personally I would not bother with Oblivion unless you havea decent setup, I love the game on my machine because the graphics and feel of the game are superb, on the machine with the 6600 GT card it lost alot of its atmosphere.