They didn't "port" it to the 360. The game was obviously designed with it in mind from the get go.
Which is why oblivion has so many short commings.
And which is also why only the PC version is any good - because of community made mods that improve the game.
Seriously, by summer this year, oblivion will be a totally different game because of the community mods... -if modders don't give up on the game that is.