All is gray in The Elder Scrolls IV: Oblivion

This is mostly caused by some bugs with newer graphic cards and HDR + AA (Anti Aliasing). Either turning HDR or AA off, or setting HDR to Bloom should fix the issue.

I do not know about any patch that fixes this issue. However, there is a few workarounds to get both of them working together:

• Enabling HDR, and disabling AA in the game options, while forcing AA to be enabled via CCC (Catalyst Control Center)
• Editing the "Oblivion.ini" file manually. Find and change the iMultiSample=0 in [Display] to 4 to get 4xAA.

I have an ATI/AMD Radeon HD 6750, also on Windows 7 64-bit, using the current latest drivers. I have HDR enabled, the rest of the graphics settings are at max, 4X AA is forced in Oblivion thru ATI Tray Tools, and I don't experience this issue.

I have the Unofficial Oblivion Patch, Unofficial Shivering Isles Patch, Unofficial Official Mods Patch and UOP Supplementals installed, though. These mods fixes a lot of bugs and might also have a fix for the issue you described.

The mod, Natural Faces replaces the texture files of the faces to higher resolutions, and might also fix this issue.

Reinstalling Catalyst Control Center seems to fix it. I suspect GPU scaling may cause some problem since I need it on to fix a black border issue on my 27" screen. I'll try the HDR to Bloom fix if it reoccurs.