You can add other items to your followers' inventory by reverse pickpocketing, but only if the item is zero weight. Most followers will pick up the best quality weapon available in the area when they start attacking, so all you need to do is drop a good weapon in front of them at the start of a fight. And since NPCs never repair their equipment, it can become useless after a few fights. One limitation of NPC followers is that they generally have mediocre equipment. It also addresses the issues of equipping your followers and managing them:
Keep in mind that for many of these characters, if they die their quest will fail, so its up to you to decide if you prefer a follower or the quest reward. This page on the oblivion wiki has a lot of your answers, including a list of all possible followers that you can get (even quest related ones).
