The Clavicus Vile Glitch and Workaround
I'm not sure this happens in all of the games but there is a known glitch with the Umbra Quest for Clavicus Vile. But there are 2 workarounds available to people caught in the glitch.
But here's how it starts.
If you accept the quest from Vile, his Hound's statue will appear in your inventory. It will try to convince you not to give Vile the sword. After you kill Umbra and get the sword. You'd return back to the shrine and ether give it to him or not. As soon as he stops talking, his hound would start to speak. Then the game would lock up. If you're stuck with that quest open and the annoying Statue in your inventory, there IS a walkaround.
1. Get the sword before accepting the quest for Vile then go to the shrine and activate it. Vile will immediately ask for you to give him the sword and you can then choose which. You won't have to pay 500 Gold to speak with him, and you don't have to be Level 20.
If you've saved after you've accepted the quest, then you're stuck.
More tricks, tips and cheats for this game are right here - The Elder Scrolls IV: Oblivion cheats
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