Oblivion prioritizes mods by load order, I'm not really an expert on it but the lower a mod is in the load order the more important it is to the game. So if two mods overwrite something, the mod loaded after it would take precedent and it's data is what the game would use. I do know though that load order plays a massive roll on how well mods play together, so a bad load order will completely ruin your game if it even runs at all in the first place. That's why you use that BOSS tool I linked in my post, it sorts the load order for you to be as efficient as possible so you don't have to worry about making any mistakes.