I don't know if it has to do with my crappy pc or whether I screwed up the installation but my main issue that's making the mod unplayable for me is that the lanterns are casting weird rays and I wouldn't have any problem with it if it didn't affect the fps.
I'm attaching a couple of pics in case my description doesn't make any sense:


I use oldblivion to run oblivion. I run it at the highest settings and the weird graphics as seen in the screenshots are the result of oldblivion disabling some stuff because of the low fps (which is caused by the lantern rays).
I've played over 300 hours of Oblivion and Shivering Isles on this pc without trouble so I'm not sure if it's my pc to blame.
I only downloaded and installed the huge 2~gb file and the morroblivion installation. The huge 7zip file, I just extracted it blindly to the data folder.
I couldn't find any info on this on google or your forums so I'm sorry if this was already resolved.

As I recall Oldblivion is a
As I recall Oldblivion is a program which disables some shaders and effects in Oblivion, right? Is there any readme file which says what exactly it does? I don't think anyone ever tried run it with Morroblivion before.
Does this happed only with this particular lantern type or do you have issueswith any other light sources in the game?