I could play Oblivion on medium with my old setup, which was about half as good as that (512MB RAM, GeForce 6800, 1.8Ghz Sempron) at 1024x768, or on low at 1280x1024. Depending on what res you run at, you might want to try that.
i had a similar setup about a year ago. (7600gt, 1.8ghz, 1gb ram) i could run graw 1 and 2 on low with medium fps...oblivion tore the fps apart with anything over low with 1280x1024 and it still was in the 20fps range...nwn1 worked well...nwn2 worked okish on low with 1280x1024.