The tutorial for lockpicking in Oblivion only tells you to toss the rails up into the upper part of the lock. The FAQs so far on the web talk about timing, but I have found a slightly better way of describing how successful lockpicking works.
A higher security level will make lock picking easier. Lockpicking works by tossing a rail up into the upper half of the lock and pressing the 'A' button on the 360 pad (or by left clicking with the mouse on the PC version). Once all rails are locked in the upper half of the lock, the lock becomes unlocked. If you don't press the 'A' button at the right time the rail will come crashing down, break your lockpick and you will have to start again with a new lockpick.
What nobody will tell you however is that there are different speeds to the rails. If you push a rail upwards the game will take your security skill, lockpick skill and luck to calculate a rail speed. If you are better than the lock, the rail will rise slowly and then fall slowly making it easier to pick. If however the lock is better than you, then you are going to have to keep tossing the pick up until the rail rises at the lower speed. The trick is to listen to the rails noise because the lower speed makes a slightly different noise to the faster tosses. I have managed to pick locks on noise alone. Simply toss each rail a few times until you are confident you can lock it, once it raises at the slower speed, lock it, don't bother with the faster tosses. With this technique I have managed to pick Hard locks without loosing a single pick and I am only level four and I am not even playing a thief character either (in fact I haven't yet managed to successfully pick pocket someone yet). And the auto-lockpick breaks all my picks too, so taking your time really does payoff.
One last thing, if you want to break into a house without being seen or chased by guards, go into sneak mode next to the door you want to open, wait until the eye in the centre of the screen goes dark and then activate the lockpicking mode. Time is stopped at this point so you can take as much time as you like. Once the lock is open you will be inside, but because you where in sneakmode when you picked the lock and nobody was watching, no guards will be looking for you. The only thing you have to be concerned about is the homeowner.
