Fallout 3 is the superior game. It actually features a game world that's worth exploring, superior character development system, better plot (yes, it's bad, but Oblivion's is worse), better combat, etc.
Oblivion is boring, bland, uninspired, monotonous, full of broken game mechanics, terribly written, atrociously voiced, etc.
However, I have a theory as to why Oblivion has such a big fanbase despite being a poor game:
Oblivion managed to come out at the right time. It hit a whole new generation of players who haven't been exposed to the generic High Fantasy settings yet and therefore managed to feel fresh to them. Also, the new generation didn't really have much experience with RPGs (or Western RPGs) and didn't really know any better so this was "The Shit!", so to speak.