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the internal screenshot function supposedely is purported to stop working if anti-aliasing is enabled in the settings, but forcing AA via ENB or your drivers can be used as a workaround
alternatively, oblivion reloaded has it's own screenshot functionality that can be rebound to whatever key you deem suitable, or entirely disabled if needs be
I suspect display resolution is also a factor. It still "works", but the files produced aren't valid bitmaps - most viewers can't open them, and those that do won't render them correctly. FWIW I've written a tool that corrects them[www.nexusmods.com].
It may be worth noting that Oblivion's screenshots (BMPs, created via the PrintScreen key) should appear in the game's installation directory, whereas the Steam overlay's screenshots (JPGs, created via the F12 key) are buried away elsewhere (there's a button to manage the latter down the bottom of the page that appears when you select the game within your Steam library).
If the Steam overlay is active, you should see a little pop-up window telling you so when you start the game. If that's appearing and F12 still isn't working, have a think about what third-party software you're running that might interfere - BitDefender has been known to do so, for example.