Ok, I have the latest patched version of Oblivion, and the so called 'latest' version of CS from the Bathesda site, and when I try to load the main data file, CS says the data file is a higher version than it can load... WTF? Is there a later version that I don't know about?

There are 2 versions, I use the 1.2 version withought any problems. I wud check the version number in the help/about menu in the CS

If it's the 1.0.303 version that you have, you won't be able to open any mods made in 1.2 without changing their version with TESGecko, and won't be able to open the 1.2 version of the .esm. If you have the other version then you probably have something installed wrong.

Ok, My CS version is 1.0.303. My Oblivion master file is 1.2.0416. All other plugin and mod files aside, I will not load even just the master file. What is the TES Gecko you mentioned?

you should use the 1.2.404 CS's version. Unless you are trying to make lipsynch since it is broken in the newer version.

TES Gecko is an utility that among other things allow "fooling" the game forcing different version number that the one the mod was done. No need to say that using this feature is something the user MUST know what he is doing.

Edit: The version you have is the "last" version for 1.1 patched game.

Changing the version of the .esm is a BAD idea.

Simply, you downloaded the wrong version of the CS, or did not install it right. This is why you cannot open the Oblivion.esm in the CS. There is nothing that you need to do outside of making sure you have the correct version of the CS installed.