Upon hearing that folks were having a few issues with the latest version of the CS (v. 1.2.404), we’ve uploaded the original one back onto the site here. This version of the CS will allow for creating mods that can be run on unpatched versions of Oblivion or to create lip synch files for voiced dialogue.
When I spoke with Todd, he suggested that modders looking to do lip synch work should use version 1.0 because the middleware we use for generating lipsync data is not compatible with the new features we added to version 1.2, despite us trying to make it work.

what exactly i need to begging edit or create something in oblivion construction set
How do I install version 1.0 without uninstalling version 1.2? I need 1.0 to make the lip synch files to bring into 1.2 (as described here: http://cs.elderscrolls.com/constwiki/index.php/TES_Construction_Set)?
Ok, nevermind,. I installed it in a new directory and copied the other files over. Of course, it won’t load the esp I made in the new version, but I’m going to try the Lip Template esp and re-type all my dialogue. I wish I’d made my quest with the old Oblivion. Live and Learn.
Lip Template, if anyone actually reads this: http://www.tesnexus.com/downloads/file.php?id=13742