I found the feature for grabbing the living, it's under gameplay.. 4th from the last in your oblivion ini.. under my games/oblivion.
However, I haven't tried it.. soo I dunno.. but if you're brave.. share the results.
Ill try it as soon as i get oblivion
I already figured it out. You can grab the people who go unconscious. That's it. You can't grab living and walking creatures. Still a cool lagless feature.