I think so. Even the faces look kinda more cartoonish in Fallout3 and the body and just in general, it felt more "lifelike" even if it's completely based on fantasy, unlike Fallout 3, which is pretty much based on real stuff, with the guns and Washington DC etc..
I don't know if it has to do with the code or just not optimized correctly, but If I have to turn back the visuals to get an acceptable frame rate and it looks worse, than Oblivion, then there is something wrong. Especially if I can turn up all the visuals in Oblivion and not get a any problems whatsoever.