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Oblivion Mod Manager (a.k.a. OBMM Oblivion Mod Manager) is the fantastic work of Timeslip. Not only can you install and organize mods, but also you can organize your load order and implement multiple types of archive invalidation, with ease.
Just quoting the readme here: IF YOU ARE USING THE STEAM VERSION OF OBLIVION: 1. Copy obse_1_2_416.dll, obse_editor_1_2.dll, and obse_steam_loader.dll to your Oblivion directory. This is usually C:\Program Files\Valve\Steam\SteamApps\common\oblivion. 2. Ensure you have enabled the Steam community in-game, or OBSE will fail to load.