Gamersgate installation of combined operations.
The following worked for me without any errors;
1: Install Arma 2 (do not patch).
2: Play game until it autosaves (I'm not sure if this step is needed).
3: Install Arma 2 OA (this patches Arma 2 to 1.07).
4: Play OA until it autosaves (again, not sure if this step is needed).
5: Apply 1.59 OA patch (this updates OA to 1.59 & Arma 2 to 1.09).
The reason for playing the game in between update steps is to create a registry entry. Whether or not this is really needed I'm not sure but decided to do so just to be on the safe side :-)
Update: I have just installed Arma 2 BAF. After doing so, apply patch 1.59 again which will update BAF and also fix a couple of things BAF breaks!