I have battled for about a week, trying to get the best out of Arma 2's Graphics. It took me 3 HRS to update all Sound Card, Nvidia Graphics, Direct X, Forceware, Firmware and Motherboard Drivers to the latest versions. I installed Advanced System Care ( A very Good Free Clean up tool ) And Game Booster ( Also a very Good free optimizing Programme ). I ran Several Armamark 2 benchmark programmes before all the updates and after but noticed very little change in Average scores. I messed about with the Config file ( Seemed like just an awkward way of setting your graphics options to me, ) I have installed the new Patch. And spent hours on the internet forums looking for solutions.
I am only speaking for myself and by no means an expert on modding, but I have been playing arma 2 with my view distance at 1600 and Graphics setting on High. View distance seems to be the biggest power drain ever. When your down on the ground you can't really tell the difference and It runs like a dream. I would like to see further but upto now hasn't affected the single player game exsperience at all, Even when snipeing. If you are prepared to wait for future patches and don't want to mess about with your Config files or modding I would suggest this option for now to get the most out of a buggy game.
windows home
GTX280 1GB
Phenom Quad 2.6ghz
4GB Ram