What is the best arrow that you can get in oblivion

Tricky one. I assume you mean the highest damaging arrow. There is a single arrow you get in a dark brotherhood quest (permanent retirement) called The Rose of Sithis. This arrow will kill the assassination target instantly if you hit him with his armour off. With the armour on however, or if you shoot it at any other npc, it does about as much damage as a dwarven arrow. For just standard arrows, the Daedric ones have the highest base damage. These won't appear in shops or in loot or on enemy's body's until you are well over level 18. Finally there are enchanted arrows. You can make them yourself at the arcane university or you find or buy them. I'm not certain of the highest damage but i once found some "arrows of immolation" which did and additional 65 fire damage to the target.
Then again, if you meant the coolest looking arrows then in my opinion its the elven arrows.