Oblivion:Reflect Damage

Reflect M% of melee physical damage back at the attacker during the next D seconds. This includes both damage due to normal weapons and damage from creature attacks. Reflect Damage also absorbs M% of melee physical damage which means that 100% of Reflect Damage (see below) bestows immunity to physical melee attacks. When Reflect Damage is active, you will notice that the health of your opponents slightly goes down as they hit you (particularly evident when they attack you first: their health indicator immediately appears). Reflect Damage works for percentages over 100, e.g. with 300% Reflect Damage, 3 times the amount of damage that would have been dealt by the attacker is dealt to the attacker.

Although many alchemy ingredients and ready-made loot items are found with this effect, Reflect Damage is not available as an effect to enchant items with, and only obtainable for spellcrafting by creating a character born with the Tower birthsign or during a quest from the Shivering Isles expansion.

Reflect Damage 100%
Gives the following benefits:
Immunity to normal melee attacks, be they from non-enchanted weapons, bare fists or creature attacks.
Opponents take 100% of their own damage in melee combat, provided they are unarmed or have non-enchanted weapons.
Armor (if any is worn) will never be damaged from normal melee attacks.
Armor rating will be ignored when hit by normal melee weapons.

However,
Ranged weapons, weapon enchantments, traps and falling damage will still affect you as usual.
Reflect Damage prevents armor skill gains for melee attacks; you will only get skill gains with ranged weapon attacks.

Here's a list of items which are most useful in reaching 100% reflect damage:
Ring of the Iron Fist (33% Reflect Damage)
Necklace of Swords or Amulet of Axes (33% Reflect Damage)
Escutcheon of Chorrol is a leveled item that you can acquire as a reward for the quest Sins of the Father; do the quest when you're at least level 25 to get the 35% Reflect Damage version.
The Raiment of the Crimson Scar is a leveled item that you can obtain by purchasing all the upgrades for Deepscorn Hollow; wait until level 25 if you want the 35% Reflect Damage version.
The Bladeturn Hood, available with the Mehrunes' Razor plug-in, provides up to 15% Reflect Damage.
Ring of Namira from the Namira's Shrine quest is available at level 5 and provides 12% Reflect Damage, together with 10% Reflect Spell.
Mankar Camoran’s Robe provides 10% Reflect Damage, together with 20pts Spell Absorption.
The Perfect Madness Shield , Shield of Vengence, Shield of Shattering, Ring of Retribution (not the Grand Ring) and Valdemar’s Shield (only between levels 15-19) all provide 10% Reflect Damage.
The Mirror Shield provides 8% Reflect Damage, together with 14% Reflect Spell.
Mind and Body Ring provides up to 8% Reflect Damage between levels 10-19, together with Fortify Strength 8pts.
The Manipulate Weather greater power  has a 5% chance of bestowing the Torrent ability, providing 30% Reflect Damage.

Assembling three of these items together will give you a total bonus of at least 101% Reflect Damage. The main difficulty is that the Ring of the Iron Fist and both amulets (just like other minor mentioned here) are random leveled loot.

Custom potions can also be used to help reach 100% Reflect Damage.  However, it is not normally possible to reach 100% Reflect Damage using only potions: the maximum magnitude for a Reflect Damage potion is 24%, so four potions gives at most 96% Reflect Damage.  Higher values are only possible if you exploit the glitch that allows you to drink more than four potions at once.

Notes
Reflect Damage is a difficult spell to acquire. Normally, you won't be able to find it anywhere in the game. Only those born under the Tower birthsign are able to cast Reflect Damage and use this spell effect to create custom spells at the Spellmaking Altar (Tower Warden is a Greater Power which has Reflect Damage 5% for 120 seconds on Self).  Without mods/expansions, this is the only way to gain access to the Reflect Damage spell effect (wearing enchanted items does not make this effect available at the Spellmaking Altar).
If you have the expansion Shivering Isles, there is another way to acquire the Reflect Damage spell effect. During the main quest Rebuilding the Gatekeeper, choose the Heart of Wound Sharing body part when selecting parts for the new Gatekeeper. This allows you to acquire the Heart of Wound Sharing Gatekeeper Gift, providing access to the Reflect Damage spell effect. You can only have one Gatekeeper Gift Power at a time.
Unlike Reflect Spell, custom Reflect Damage spells can only be cast on self, limiting its utility.
Custom Reflect Damage enchantments are not possible: this effect is disabled at the Enchanting Altar.
The reflected damage is affected by difficulty; hitting an enemy with reflect damage on a high difficulty will not only reduce the damage you deal to that opponent but also amplify the damage that is reflected back at you, making enemies with reflect damage much more dangerous. This also works the other way around, making reflect damage less usefull for yourself.

See also
Related effects:
Resist Normal Weapons, Weakness to Normal Weapons
Reflect Spell
Shield, Fire Shield, Frost Shield, Shock Shield

Alchemy Ingredients
The following alchemy ingredients can be used to create a potion of Reflect Damage:
 
Note that, with the exception of Flour, all of these ingredients have a side effect of damage health at the Expert level. The Damage Health effect can be avoided by using flour as one of the ingredients. Using a Master Alembic, available as dungeon loot at character level 17 and above, reduces the Damage Health effect to one damage over one second.