Thanks to all who posted for this info. It definitely helped me get MO, OBSE, and all my mods working with Oblivion.
In my own experience, I noticed that while launching from within MO using the Steam applaunch shortcut, OBSE would run but no other dll in the /OBSE/plugin directory seems to run. For example, I kept getting error messages in game from the MiniMap mod that MenuQue was not initialized. When I copied all the appropriate contents into the actual /OBSE/plugin directory and launched the game outside of MO (with the script extension hook.dll activated) everything works as expected.
I still prefer using MO (and OBMM within MO) to install my mods, and now that everything works it is (for me) really just a very minor issue.
Edit: forgot to say that I am currently using MO beta 1.1