Gaming Elder Scrolls IV: Oblivion + OBMM breaks the game?

[Sora de Eclaune]

A friend of mine is using the Oblivion Mod Manager with her PC copy of The Elder Scrolls IV: Oblivion and for some reason, if she even gets it to add mods into her game, it causes everything except the game's menus and UI to become invisible.

However, without the mod manager the game works fine. She can install mods and everything, as long as they aren't set to work with OBMM or are activated through OBMM.

She's even tried using OBMM with just Knights of the Nine, Shivering Isles, and the manditory Oblivion file being the only files activated, and it still causes this error.

She's using a Windows 7 64-bit, and has already set OBMM and Oblivion to run through the administrator account.

What could be causing this? She was going to help me set up OBMM for my own copy of Oblivion (which someone graciously traded me for a copy of Devil May Cry. LOL), but if this is a Windows 7 error then I'm not sure I'd want to even try using OBMM now...

Edit) She's figured out that it was a problem with her installation directory or something, and the admin account didn't have Oblivion.esm, but I'm still confused....