I'll tell you....with the X1600 you'll get to play Oblivian on lowest details at about 2 FPS , while with the 7600GT you'll be able to play fine at medium settings. Is that a good comparison for you? Pay more for the 7600GT, unless your sveing up for a 8800....
My 64Mb Mobility Radeon 9700 Can play Oblivion.
I get about 30-50fps outdoors, about 25ish around an oblivion gate.
I have gotten the shorter grass mod, Which increases performance allot!
And the remove the fogginess underwater, which helps allot also.
And I have gotten the shaper textures mod which increases texture size to 4000x4000 or something.
Resolution is set to 800x600
Bloom is turned off.
Distant landscape, trees and buildings are set to on.
Texture size: Medium
Tree, Actor, Item, Object fade is on highest.
Grass and view distance is on highest.
All shadows are turned off.
Specular Distance set to highest.
Water Detail is set to highest,
Water reflections and ripples are turned on.
Window reflections on, Blood decals on.
No Anti-Aliasing but running with 4x Anisotropic filtering, which only made me loose about 3-4 fps.
If you are unable to play oblivion, Try using... "Old Oblivion" You can then run the game on even the Radeon 9200 and Geforce FX 5200 as Old Oblivion can drop the level of vertex and pixel shading back down to 1.1
And from what I have noticed in most games, (Even Need for speed 1).
That with a 64Mb card, if you have all settings on highest you get "Pausing" Every now and then, Which I can really only point the finger to the low amount of RAM present on the 3D accelerator.
So if my Card can play Oblivion, I'm sure that the 1600 can play it with most settings on highest.