Elder Scrolls 4: Oblivion Discussion
But to answer your question. They appear ramdomly in loot (the torches) and crates. You can even find them in the crates in the Imperial City Market District. As far as night eye goes, check out the Mages Guild halls. I *think* Leawyin Guild Hall sells the illusion spells (night eye and light) but I'm not sure. You can also pick up a nice night eye spell if you join the dark brotherhood. S'drassa will sell it to you; its called Void Gazer.
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