But what is Oblivion Vanilla?

It refers to an unmodded install of oblivion. Patches or updates may be applied, but if it's been modded in anyway then it's no longer considered to be 'Vanilla'.

Like what Jojo said. just Oblivion 1.2.0416. I suppose opinions could go either way on installing DLCs or SI.

This is not a noob question, i in fact didnt know what vanilla oblivion was, and i've played oblivion and been on this forum for quite a while...

It's just a particular application of a term often used to mean `standard' or `out-of-the-box'. I suppose it's because ice-cream's default flavour is (usually) vanilla.

Official content released by the developer is considered 'vanilla' by most standards that i've personally seen. I guess (like you said)that it may just be a matter of opinion though.

Thanks for the help!