QUOTE(flyingskunk @ Nov 12 2008, 06:48 PM)

I dont know anything about values and sliding scales and exceeding colors (like that girl said in "Gone With The Wind"... "I dont know nutting 'bout birthin' no babies").
Well, actually I think I explained it too vaguely therefore I presume I should explain it trough out.
For the basics (that you probably know) the digital colors use color mixing by light, meaning the base color are red, green and blue, that is used to mix all the colors the computer displays. All of them may be given a value between 0 and 255 (giving every color 256 options, and therefore giving 256
3 possibilities for different colors). These values are usually determined by two character hex (from 0-8 to A-F) values (i.e. 00 for 0 and FF for 255, and as lined, they are in the form of 6 characters)
therefore value 0,0,0 (#000000) is black and 255,255,255 (#FFFFFF) is white.
While mixing colors, one creates color by giving different values for the tree base colors, and determining it's lightness by adding or subtracting from, or to, every color (sliding the values therefore towards either black (#000000) or white (#FFFFFF).
The limitation that this creates is the fact that the color value may not exceed either end, therefore if your color is, say, #88BB44 (somewhat near to dark poison green), you may lighten it to #BBFF88, or darken it to #448800 without changing the base of the color. However, if the color is lightened too much, it may become #FFFFBB, that, you may observe, is not the same color (poison green) anymore, but very light yellow, as well as the color transforms when closing the 0.
The oblivion blends the highlight color bit to the background (calculating a sort of average to the color), darkening it therefore gray from white. But what we want to do is to give a cap to the lower values when the highest value equals to FF (255), and maybe (black blends more nicely) when the lowest value equals to 00 (0), so that the color the highlight is, stays the "same".
The other possibility (that actually is more probable) is that the Oblivion uses the same highlight tone for every race, and changes only the occupancy, making every highlight eventually white (works with nords, elves, high-elves etc. but is dreadful with redguard, khajit, argonians and orcs). Therefore one should create a mod that overrides the default of "light skin pink" highlight-tone when working with non-white characters.
So, as I am not a programmer, I can't know for sure which option does the oblivion use while highlighting skin, however I may strongly assume that these are the only options, and with both possibilities, there are too easy chance to make dreadful highlights, and we can only hope that this can be overrided.