In other times, this might have simply been an interesting little thing to note. Now, we all have to worry if Oblivion is going to get the hammer laid down on it for unreported content. Not to mention the ESRB.

A modder who went to make a nude skin for Oblivion (there's always one.. well, probably several dozen), found that the job was going to be rather easier than he thought.

“In the process of trying to create a nude skin for Oblivion, I found Bethesda had already done all the work for me. They just covered it up with underwear afterwards,” commented the forum poster who uncovered the nude skin.

It's unknown whether this also holds true for the 360 version, though it seems likely. It's unknown how the game could be modded to show the nude models on the 360 if they are there, as the system is too new to have an Action Replay type device and not yet hacked to allow transfer of hacked saves.

If this is something you just can't live without seeing for yourself, GameVideos.com has a.. well, game video. Not safe for work, obviously.

Source: Gamasutra