Well I bought it and when you launch it from Steam it opens the typical Oblivion launcher like you'd have with the CD version, with Shivering Isles and all the DLC in the Data Files folder. I haven't tried any third party mods yet but from a quick look at the install files it's basically the same as the CD version but you launch it from Steam, so I can't see why it should be incompatible with anything.
What I'm not listening to is the latest Pendulum album. From what I've heard, it's actually so bad that it's literally not worth your time listening to. Therefore, I'm going back to Iron Maiden, Queen, AC/DC, and nothing else.