Okay, this thread is already super long and tends to led those non-super savvy people all over the place. (I count myself as one of those)
Here is what I did to get Combined Operations to work with Steam AND how I was able to get mods to work too!
Note: I have ARMA 2 and Operation Arrowhead installed in two seperate folders, and this method still works fine. Some people mentioned installing it all into one folder, but I couldn't figure out how to make Steam do that.
Open Steam
In the LIBRARY tab, right click on ARMA 2 and select PROPERTIES
In the LOCAL FILES tab, select VERIFY INTEGRITY OF GAME CACHE...
Once that is finished, close that window
In Steam, select ARMA 2, click PLAY, PLAY ARMA 2, and click PLAY again
Allow game to fully load. Once at main menu, exit game.
Follow the exact same steps but for ARMA 2: Operation Arrowhead
(The next three steps are only necessary if you want to adjust the command line for mods)
Now, in Steam, right click on ARMA 2: Operation Arrowhead
Select PROPERTIES, and in the GENERAL TAB, select SET LAUNCH OPTIONS
This is where you will put your mod line. Mine is: -mod=@cba;@ace;@acex;@acex_ru;@acex_sm;@a2warmod;@faces;@sthud;@sounds; -nosplash -winxp -world=empty -cpuCount=4
Now you can select ARMA 2: Operation Arrowhead, click PLAY, and you should see an option for LAUNCH ARMA 2: COMBINED OPERATIONS
I had two other friends do the exact same steps also with success.
Note: The multiplayer maps that you want and the mod folders that you want must reside in the ARMA 2: Operation Arrowhead folder. This doesn't seem to see any of those that are over in the ARMA 2 folder.
I hope that these instructions save someone else hours of frustration too.
Regards,
Vampyr_Six