What size is your monitor?
That depends highly on what video card you upgrade to if you want to upgrade.
But, from the looks of what you said right there, you need a -
NEW COMPUTER - If you want to play that game at high graphic settings.
My computer could play Oblivion with completely maxed out graphics at a resolution of 1920x1080 (1080p Full HD) and these are my specs -
AMD Athlon 5600 X2 OC'ed to 3.0Ghz - Dual Core - Around 50 bucks
ATI 4870 512Mb video ram - $200
2GB DDR2 800Mhz Ram - $50
Good motherboard - $70-$150
Add a few more things to that and you got yourself a computer
But, in the end, a 1.7Ghz Pentium 4 is NOT going to run a game like Oblivion on max settings. The game itself uses at LEAST 1Gb of RAM. Your video card has 128Mb of RAM.
Don't you pay attention to the system requirements at the bottom of the box?
Minimum System Requirements for that game are -
A Pentium 4 or Athlon XP Processor
2Ghz Processor - Yours is 1.7Ghz
RAM - 512MB - Barely pass
Video Card -
128MB Direct3D compatible video card (NVIDIA GeForce FX 5700+ / ATI Radeon 9500+) - Your running the game under the Minimum System requirements - put all settings on low unless you want to get a new computer.