Fast travel is also useful to move around within the cities (especially the Imperial City)... it's kind of like the gondolas in Vivec, in that regard.
I mean, within a city you're unlikely to suddenly stumble on a forgotten ruin or meet some unexpected wildlife, so using fast travel in there makes sense and doesn't feel like cheating. You can't FT from the local area map, so you can't zap straight to a shop or house of interest, but you can still usually FT to each gate and the local castle, or any district in the IC.
My general feelings about Obilivion are fairly consistent with the other posts in this thread. I've played it through to the completion of the MQ and the Mage's Guild quests, but the lack of thought required starts to become a problem after a while for an older gamer like me. I took it as a point of pride to work out a certain puzzle involving books in the main quest on my own without being spoon-fed by the NPC, but even so the solution was the first thing I tried, and that's probably the largest sense of actual achievement I felt in the game beyond simple character building.
Having the big glowing arrow that points you towards your goal allows you to just... follow. And then when you want to find someone
not a quest target in town, you have to run around for ages trying to find them. I'd have much preferred if they'd set things up so you could ask random individuals if they'd seen such-and-such, and they could say "they're usually at the temple at this time of day" or similar. Personally, I'd have happily foregone the 100% voiced dialogue for that feature.
Anyway, I've enjoyed playing it, overall, but my annoyances with it have inspired me to actually start coding up my own game I've been designing for years. So, it's all good, I guess