Oblivion was, sadly, a little generic when compared to past games in the series. Morrowind had an utterly brilliant setting that was totally unique, and Oblivion was sort of a return to form of the more standard stuff from past games. It wasn't that it was really generic... there was plenty of awesome stuff in there, it was just spread a bit too thin and there wasn't a lot of stuff that would just totally grab you up front. A little more of the exotic feel from Morrowind would have helped.
But yes, Bethesda's big problem has always and likely will always be the technical stuff. It can sometimes be avoided if you're in a good spot and have a system the game likes or whatever (Oblivion didn't have too many problems for me), but if you get bit by some bugs or if your system just doesn't jive with the game, it can be really bad.
But yes, Shivering Isles is a much better representation of that Bethesda can do (creatively) when they try to break the mold. I sincerely hope that TES5, whatever it will be and whenever, will take place in one of the more exotic locales that haven't yet been explored. Black Marsh or Elsweyr would be prime, prime spots... Hammerfall wouldn't be bad, either. Everything else would run the risk of being a little bit typical fantasy, and I think they need another shot of something different before they go back to that.
It isn't so much a problem for me because I'm totally into the fiction and stuff. Not really even the presentation of it, which is sometimes lacking, but there's so much more to these games than you get if you just play them. If you actually treat them as proper fiction with extremely deep roots, you get to a whole new level which makes you appreciate the rest of it a good deal more.
