Level scaling, the higher the level the player becomes the more difficult the critters become. This means that there are no easy or scary areas in the game, since they are all accessible from the start. This wasn't the case in Morrowwind (which was a superior game).
So, lets say you just freshly started a game and go into a cave, you might find a rat to battle. But when you'd enter that same case when being level 20 there's be a Big Ogre or whatever the game had for big monsters.
Morrowind hand the Ashlands which you avoided like the plague at the start since it would mean certain death, and while gaining levels you'd slowly try to battle your way into them. In oblivion you'd walk in and see a rat.
Yeah, I remember that mod. I wasn't going to install and start a third game though.