Morrowind is the best RPG for Xbox. This is undisputed (or should be). While there is a main quest, it doesn’t have to be completed. The game has a non-linear structure, which makes it a little more like a tabletop RPG. Perhaps the best feature of its non-linearity is that you can do whatever you want. In my game, I did 50% side quests, 20% main quest, 30% exploring. By contrast, Crabby did 10% main quest, 15% side quests, and 75% burgling. Watch your wallet around her.
Anyway, Oblivion is the 4th installment in the Elder Scrolls world. It will be out for PC and X360 and it looks stunning. Boomtown has a preview. The article has this to say about the new physics engine:

We were also shown a scene in which the hero shot an arrow at a bucket hanging on a strap. Not only do did the arrow get stuck in the bucket, making it swing from side to side, it was also retrievable. And even cooler, the arrow made the bucket tilt to the side because of its own weight.