This was the very reason I bought an Xbox 360, as it was cheaper than renovating my PC to the level that required to make it even playable. Morrowind was (still is) my favourite game ever, and I don't play that many games but when it comes to the Elder Scrolls It's always well worth paying for upgrades and the like because you just know Bethesda don't mess these games up.
Oblivion is the best game out on Xbox 360. Fact. It's beautiful, not difficult to get into and ultimately rewarding when you level up and reap the rewards of your persevearance and procrastinating- play your cards right and you end up a globe-striding Collossus able to decimate anything in your path. The combat system is excellent, the Havok engine is (almost) perfectly implemented and I confess there is nothing more satisfying than felling a deer with a single arrow from some undergrowth. It's fun, smart and every just works brilliantly, on the surface. It comes for a price.
It's huge, there is loads to do and after five months of playing most days I'm not bored with it quite yet, but although it's still clearly a masterpiece, it's not a patch on Morrowind.
Most of the things that Oblivion does, Morrowind did better. There's the compelling, meadering storyline, which was deeper and far more interesting in Morrowind. There's the huge, expansive world full of nooks and caves and decidedly dodgy places as well as the major cities, which was bigger and more mysterious in Morrowind. Often you find places on Morrowind on some remote island, that despite your best attempts, you NEVER find again with a different character. The whole scaryness and vastness is reduced substantially. There's the guilds to join, giving you so much to do, but there were three times as many in Morrowind. The side quests were better. The magic was better, enchanting is now such a drag and unnacceptably, not available to lower level characters. The background lore is almost transparent in Oblivion, whereas after years of playing Morrowind I still feel like I've barely scratched the surface.
So, if you will, there's a pattern emerging where there are all these qualities that Oblivion has are all overshadowed by what Morrowind already did and did better, and that it's been quite obviously dumbed down for the console market. Without being aloof- Morrowind didn't sell too well for a reason, and it's a reason I quite liked.
Think of it as a brilliant rock band who have built up a devout fanbase by playing obscure but fundamentally excellent music and then alienated them by releasing smoothed over, accessable pop music in a bid to win more fans. It's worked, but it fustrated the fans of the old material.
Oblivion is still one of my favourite games of all time, and it's the best game for the 360, and it's unlikely that it will be beaten in terms of gameplay and sheer enjoyment by any game on any console for a very long time, but search deep and the fans of Morrowind will find bits and pieces missing that makes the whole experience feel a bit plain and uneventful.