Hmm I seem to have found a sort of incompatibility between games.
I have Ghost Recon Advanced Warfighter loaded. This game uses the AGEIA physics engine, which required a separate install of the engine itself outside of the game. Now, apparently this seem to clash with the Oblivion physics engine, which is Havok engine.
I noticed that things seem to be a bit wonky when playing Oblivion with the AGEIA engine running in the background (it’s a separate thing by itself, unlike Havok which is part of the game). Spell effects either get stalled or go in slow-motion in Oblivion. Doors open in slow-motion. Fires either stop burning or burn in slow-motion.
Removing the AGEIA engine fixed this problem. So I’m guessing 2 physics engines running at the same time is not a good idea.
Edit: – OK I was mistaken. It seems that the cause of this problem is my savefile for Oblivion, which seemed to become increasingly corrupted as I play my main character. I think I might need to search on the forums for a resolution to this…