The team working on the MERP mod, a total conversion LotR mod for The Elder Scrolls 4: Oblivion, has just released beta version 0.2.4. The mod recreates the world as Tolkien envisioned it, with special attention given to lore. MERP describes themselves and their work here:
The MERP team is making an addition to Oblivion. That is, the world of Middle Earth! It will add all of Middle-Earth in it’s entirety, obviously including such places as The Realms of: The Shire, Eriador, Rohan, Rhovanion, Gondor, Mordor, and many other locations!
The MERP topic on this forum can be found here
The beta can be downloaded here or here
Make sure to check it out!

Comments:
Jelkey:
lucky me
i just reinstalled Oblivion:P
i will sure check it out
TokyoBlade:
That's one hell of a project they have there (A LOTR total conversion of Oblivion :P), will take a long time before this is finished.