My answers are "What?." "I think so, seeing as I've already explained it to 3 people, who may or may not have completely understood." and "Not quite"
In the Oblivion CS, you'll find that you have the same looking Gridsnap and Angle Snap buttons that you had before. If you go to preferences (under the "movement" tab), you'll find that you have the same "Snap to Grid" check boxes and number fields, albeit rearranged somewhat. But those are the same, for modular pieces, you'll need to set those to something like 16, 32, 64... and angle snap will need to be set to an angle that is divisible into 90 degrees (actually, 90 would probably be best) you know, just like Morrowind's snapping of modular things.
But what's this? "Snap to Reference" ? "Select Snap Reference" ? What's that mean!? Let us take a looksee. Open up your CS, and follow along, if you like.
First, make a new cell, or if you just want to try this out and don't want to save it, test it in an existing cell. Whatever works. I made one and called it TRSnappingTutorial.
For my example, I'll use the Castle Wall pieces (those that surround any given town in the game; found under Static->Architecture->Castle). First, I'll drag in a castle wall piece...lets choose... CastleWallCurve02. Now, without having gridsnap or anglesnap on, I've rotated and positioned it pretty randomly. [url=http://i5.photobucket.com/albums/y171/PoHaEiFor/TutorialPics/SnapTut01.jpg]Clickey for Pic.[/url] (Top view of the object is in the render window)
Okay, now we're going to snap something to it. *GASP* you say. Maybe. Open preferences, and click on that new button with "Snap to Reference" next to it. A new window should appear, titled "Choose Reference." Now, click the button that says "Select Reference in Reference Window" and you'll get a little red target for a cursor. Double clicking on the castle wall will tell the CS to use THAT reference's position and rotation for the grid and angle snap. [url=http://i5.photobucket.com/albums/y171/PoHaEiFor/TutorialPics/SnapTut02.jpg]Clickey for Pic.[/url] (yes, my angle snap is set to 45 in that pic. No, I really don't know why, but I likes it that way
)So, if you haven't already, click "OK" in the 'Choose Reference' window. Then check the Snap to Grid and Snap to Angle boxes, and click "Apply" then "Close." Now, drag a new object into the Render window (I chose CastleWallCurve04). Notice that it is NOT on the grid, and NOT rotated according to the angle snap. Just like in the previous CS, you have to move it to get it on the grid.
However, unlike the previous CS, you may now have to rotate the new reference at least once to get it on the angle snap properly. Further, it WON'T snap to the proper angle unless its rotations are set to 0, 0, and 0. Otherwise, it only adds your "Angle snap" number to the reference's current rotation. Weird? yea, maybe... oh well.
So, after moving it, and rotating it on its Z axis only ,(the CS automatically performed the other rotations when I did my z rotations; ie normal right click and drag on the object) I have it properly aligned. [url=http://i5.photobucket.com/albums/y171/PoHaEiFor/TutorialPics/SnapTut03.jpg]Clickey.[/url]
But does it work continuously? [url=http://i5.photobucket.com/albums/y171/PoHaEiFor/TutorialPics/SnapTut04.jpg]Yes.[/url]
Does it work for other modular things? [url=http://i5.photobucket.com/albums/y171/PoHaEiFor/TutorialPics/SnapTut05.jpg]Yes.[/url] (Though you may need to set the grid snap to a smaller number for the small things. For instance, the stonewalls wouldn't snap right until I changed it to 16)
[rant about rotating tiles that shouldn't be rotated]While I'm on the subject of Gridsnapping, I would like to point out that rotating modular tile pieces that have A, B, C, and D at the end of their IDs is, generally speaking, a bad idea (this applies mostly to the cave tile pieces, but some Fort Ruins tiles also use it, and there may be others that I just can't think of). Why? Because those tile pieces were intended to be a specific side of the interior. Their textures align with other specific tiles, and rotating one tile and not rotating another in the same exact matter (I speak most specifically about the z axis rotation) will almost definately cause there to be a visible seam between them, caused by a misalignment of textures.
So how do you avoid this issue and still have a corner of a cave room in the location that you want it? Remember, these Tiles have A, B, C, and D variants. If you never rotate any references then you can find a corner for those two sides, you can find a wall with an exit for the East side, etc...[/rant]
I welcome questions, comments, etc. here
And... if you want to see it for yourself, I've attached the .esp for your viewing pleasure 
Edit: And, because I realized how long I made that, here's a much condensed version:
1.) Have a modular object in your render window. Rotation and position doesn't really matter, so long as its where you want it to be (unless its special; see my rant above).
2.) Go into preferences, click on the "Select Snap Reference" button. You'll get a trigger. Double click on the reference you want to snap to in the render window. Turn on Angle Snap and Gridsnap.
3.) Bring a new object into the render window. If you already have an object that you want to snap to the one your using for a Snap Reference, then you may need to manually reset its rotations to 0, 0, 0.
4.) Rotate and position the new reference. It should be possible to snap it to the one your using as a snap reference. If not, then try lowering your Gridsnap amount in the preferences window to 16. 32 or 64 may also work, but not for some of the smaller sets.
