Anyone from the UK see the recent episode of Gameswipe?
Dara O Briain had a rant where he discussed why he should be made to work to earn the game content when he's bought it. He used the analogy "When you finish reading a chapter in a book, you aren't made to prove your understanding of it before you can move to the next one. It's my book, if I want to go to the last page, I can. Why can't I do that in a game?" (or words to that effect).
It seems like a fair point, so you should have the choice about the game you play.
In my opinion though, I hate games that level up with me. I like the thought of an area in a game that will kick my arse because I am clearly not ready and at the same time, being able to go back to an 'early' area and kick them about if need be.
This is why I found Oblivion quite a repetitive experience of a game.