Install Oxygen 2
How to get a working Oxygen
At first, you need Oxygen 2. You can find the download here. After you have downloaded the file, you have to extract it. (Gasp!) You will find an exe called "Oxygen2PESetup.exe", start this and follow the instructions. The installation path is nothing special, type in where you want to install your Oxygen 2. Avoid blanks.
After this is finished, the installer will ask you, wether you want to install BIS's Tool Drive. Accept it, because you will need it.
At this point Oxygen is installed, but waste no time on parties, it is still not finished. You have to configure your Oxygen.
Start your Oxygen.
Oxygen consists of two Programs. The first is the one you've started right now. The second is called Bulldozer and is the "Viewer". With this program you are able to see your model what it will look right now in Arma. This program is already included in your Arma exe file, but you need to configure it.
Open up the Options menu: (File → Options)
This is, what it should look like:

Now your Bulldozer will be ready to use. But you are still not finished.
You are not able to use textures in a proper way. You will need the "old" DLL Files from Oxygen 2 for Operation Flashpoint. You will get them at Mapfact.net.
(Oxygen2PE_DLL.rar (dead link))
If you are using the Oxygen 2 for Arma 2, you do not need to exchange the DLL Files.
For now, if everything went glad, you've got a fully working Oxygen 2 for Arma modelling.