Installing SI does not change the game's version. Whether the patch was for Oblivion or SI does not matter as the patches apply the same fixes. Some of the reasons for the latter motivation might be that Vanilla Oblivion does not seem to work as it should, the game was patched with an official (beta) patch other than the latest official patch (v), such that they are unable to patch the game with the latest patch. The former consideration applies to users Win7 and Vista users that have the game (or Steam) installed in the default foler, Program Files, or those that simply want to move the game. This step is only for users that have Oblivion installed and need to move it, or those that, for some reason, feel that completely reinstalling the game is the only way to have it work properly again.