Elder Scrolls 4 Oblivion for xbox 360?

ok, I try to talk to people, like shop keepers and brother martin (the kings heir) and the only option I am getting is pick pocket!!! Its getting old. I cant sell my stuff, I cant go to an inn to rest, nothing...just pickpocket. Do I need to start over? I chose to be born under the sign of the thief...is that the problem???