Sheogorath's quest where flaming dogs fall from the sky.
It's even funnier if you do it during the later half of the Shivering Isles story; Sheogorath or Haskill will lampshade how you're screwingaround like this when Jyygalag and his army are on your doorstep in the Isles.
On the other hand if you do it after the Shivering Isles story, Haskill will make weary comments about how you're basically just worshiping yourself like a jackass.
During the Thieves' Guild quest "Misdirection", all the guards will run around the Waterfront, asking about the Gray Fox. Sometimes they'll even interrogate each other... and if you're standing nearby, they will look at you and simultaneously ask you the same question. Even better when they have the same voice.
"Rat Ragout with Powdered Deer Penis!"
In Sanguine's shrine quest, he tells you to cast a spell called "Stark Reality" on the Countess of Leyawiin and her company at her dinner party. The spell strips anyone in its range of all of their equipment, but he neglects to mention that the spell also affects the caster (you are completely stripped of all your items when you use it). Using it is also considered assault because it has a "Drain Health 1" effect, so the guards will immediately try to arrest you. So if you don't want to go to prison, (since the spell also removes all your gold so you can't pay the fine,) you're forced to run out of the city butt naked with a bunch of angry guards chasing after you.
The random conversation system in Oblivion can result in a lot of hilarity when certain lines are combined.
Citizen 1: "Do you think what happened to Kvatch would happen here?" Citizen 2: "Without a question."note For those who don't know, Kvatch was overrun by Daedra that spawned from sudden Oblivion hell gates, and then burned and destroyed.
Mage: "Noble scholar, may I have a moment of your time? It's rather urgent." Scholar: "Good day."
Sheogorath, at one point during the Shivering Isles expansion, says, "I'm so happy I could just tear out your intestines and strangle you with them!"
And later - "Then out come the intestines. And I skip rope with them!"
Sheogorath's response if you choose to replace Syl:
Sheogorath: A dangerous choice. I like it!
"You have pleased the Mad God! I, for one, would still like to eat your eyes!"
Let's not beat around the bush here, Sheogorath averages a brilliant and usually hilarious line every two minutes or so. At least until his final conversation...
During a certain Mages' Guild quest (Liberation or Apprehension), you meet a Wood Elf named Fithragaer inside an Ayleid ruin (Nenyond Twyll). After a little chat, he eagerly runs deeper into the ruins to beat up some necromancers... and gets caught in a ceiling spike trap.
To top that, there's a glitch that'll cause the spike trap to keep activating as long as Fithragaer's corpse is on it, meaning that the trap will continuously pummel him into the ceiling!
In Skingrad, ask Falanu Hlaalu about the city. She'll ask you if you know what the fine for necrophilia is, and she'll be very happy if you give her the answer.
Champion: Is it the first offense? Falanu: Let's assume... no. Champion: Then it's at least 500 gold. Falanu: That's nothing compared to Morrowind, thanks!
The fact that your PC even knows what the fine is raises questions as to why he/she was in jail in the first place...
If Game Mods count, there's one mod that overhauls the way beggars work (so they can pickpocket you if you stand to close to them, you can contract diseases from them, et cetera) in addition to adding several new ones around the game. One of them, in Skingrad, is a skooma addict and has his own lines. The only thing he'll ever say, no matter what you ask him, is "SKOOMA!". One of your dialogue options? "Aagh, get away from me, you freak!". To which he replies "SKOOMA!"
There's a woman in the Shivering Isles who's addicted to skooma, which she asks you for every time you talk to her. If you give her some, she shouts "Skooma! SKOOMA!"
However, if you don't give her any, she'll be greatly upset and tell you she "hopes you trip and fall on a sword!" ...And then give the player a casual "farewell."
In the Shivering Isles expansion, you can encounter Hirrus Clutumnus, who tells you that he wants to end his life. However, he can't actually kill himself, otherwise his spirit will end up trapped on the Hill of Suicides, so naturally he asks you to do it. Fortunately, he happens to visit a balcony without railings, and you have the dialogue option of pushing him off. The best part is the total non-reaction of the Dark Seducer who sees the whole thing happen. Apparently, this sort of thing happens all the time...
One cavern unrelated to any quests features a dead goblin and a large beer keg. The goblin is lying on its back with its face under the spigot.
One quest is given to you by a drunk who believes that there's someone in Cheydinhal that looks like him. He tells you, dead serious:
Reynald Jemane: You're going to travel to Cheydinhal, and find out what sort of imposter is trying to besmirch my good name. And you're going to tell him... *hic*... You're going to tell him I am quite capable of besmirching my good name on my own. He should cease and desist immediately.
The top comments read: "He didn't forget, it's just a very poor cover-up!" "The video is a metaphor for government."
The Summon Haskill power from Shivering Isles. Haskill is Sheogorath's chamberlain and literally the Only Sane Man in the entire realm. If you haven't played the game, imagine you have the power to summon a stereotypical dry-witted British butler at will to give you helpful but snarky advice on your quests.
There's a dungeon in the Shivering Isles specifically designed to lure in adventurers and screw with them. The one that takes the cake is an illusion that makes an orc see his corpse laying on the floor and see himself as a ghost. He has a debate with himself about how he can't possibly be dead because he wasn't in a fight yet there's his body and its so unfair.
Imperial Legion Foresters are programmed to hunt deer. Deer are programmed to be friendly to foresters, so if the forester sees anyone else attack a deer, they'll start fighting the person. Sometimes, the foresters' patrol areas overlap, and you may come upon a scene like this...
Even better, if you're playing as a lawful character, when the forester manages to kill the other forester, he can turn to you and say "It's nice to see a friendly face in these dark times."
You finally get the chance to make the arrogant Yellow Team Champion in the Arena eat her words late in the questline. However, it's a three-against-one match. The Arena Blademaster decides to even the odds a little in your favor, though, by sending a boar named Porkchop up to have your back!
During one quest for the Fighter's Guild, you meet Lord Rugdumph gro-Shurgak, an Orsimer nobleman whose daughter has been kidnapped by ogres. Rugdumph tries to sound educated using big, complex words. He needs some practice (or a dictionary).
I am Lord Rugdumph gro-Shurgak. How may I persist you?
Horrible creatures! Replete with horror and evil. They roam freely eastward of the estate. I look forward to you exterminizing them.
When you ask Modryn to be second-in-command, he says "I was just getting used to being retired. You can see how good my painting is getting." In the back of his house you can see an example of one of his paintings◊.
Congratulations on becoming the Archmage you now have his position and quarters and even outfit. then you start the thieves guild quests you get hired to steal a staff and leave a note for the archmage.
To kick off the Knights of the Nine questline after finding the Anvil Chapel massacred, you have to get help from the Mad Prophet outside to figure out where the first piece of the Crusader Armor is. However, the conversation forces you to invoke Humble Hero. Responding to his question of if you are a worthy knight with "Yes, I am a worthy knight/Fighters Guildmaster/Archmage/Hero of Kvatch/etc." causes him to remark that you must not need his help then, you have to tell him that you have no claim to fame. Or you can tell him that you're the Gray Fox or the Listener of the Dark Brotherhood, to which he will respond with bemusement, and then help you anyway.
Guard programming allows them to pursue you through multiple areas if they catch you committing a crime, just like a real one would. That's all well and good, but due to the way it's implemented, you can sometimes end up being pursued relentlessly by a hyper-determined guard, who will literally follow you across the entire game map in a desperate chase to bring you to justice, no matter how minor your crime is. Further, this can lead to them finally catching up to you at the worst/best times imaginable; Merhunes Dagon may be demolishing the capital city, but the guard is going to take that flower stealing motherfucker down!
The suicidal troll Easter Egg, in a Black Comedy way. Basically a troll gets suicidal because how bad he is at making people pay a toll to cross the bridge he lives under, so he, in his own words, "get drunk and kill self". Even more darkly hilarious, judging by the state of his body when you find him, he apparently somehow killed himself by jumping off a bridge that's barely two or three feet above the water.
A quest in the Shivering Isles involves an orc who's afraid of cats and is tormented by how some creepy Khajit is following him around despite the dogs he got to scare the guy off. He asks you to get rid of him and when confront the Khajit you learn he's following the orc because he likes dogs and wants to pet the orc's puppies.
And than afterwards the orc rewards you by giving you one of his dogs. Specifically, his dead one, revived as a skinless Animal Abomination through necromancy.