Lots of confusion about this so I spent this morning sorting it out. Here's what you have to do to be able to play properly in 1.7:

- Install both games
- Download the official patch and install it. Available here
- Download the latest beta patch for ARMA: OA from here (the one at the top in the green bar)
- Extract that patch and run it.
- Download DayZ from here. You need to download all of the 1.6 files and extract them then download the 1.7 file and extract it. (DayZ should be extracted "Your ARMA 2 install location/@DayZ/addons/")
- To run the beta you have to either explore to your ARMA 2 install and modify the "Launch ARMA 2 Beta Patch" shortcut so that it has "-mod=@dayz -nosplash" after the target or add teh following to your stadard CO/AO shortcut:
"-beta=Expansion\beta;Expansion\beta\Expansion -mod=@dayz -nosplash"

Either way you should end up with a launch parameter that looks like this:

"DRIVE:\ install path for ARMA2\arma 2\Expansion\beta\arma2oa.exe" -beta=Expansion\beta;Expansion\beta\Expansion -mod=@dayz -nosplash

So for example mine is:
"C:\games\Steam\steamapps\common\arma 2\Expansion\beta\arma2oa.exe" -beta=Expansion\beta;Expansion\beta\Expansion -mod=@dayz -nosplash

ADDENDUM:
To get the BETA ARMA patch workign along with 1.7 on STEAM you need to look here. Its a little more complex and involves editing one of STEAM's files but its manageable.

_________________
"Fire rained from the sky on the day I was born: 10,000 lives I ended before drawing first breath. Do not speak to me of guilt or regret, Jonathan.” - Brayan, The Keepers of the Fire

RESERVED for client tweaks info

_________________
"Fire rained from the sky on the day I was born: 10,000 lives I ended before drawing first breath. Do not speak to me of guilt or regret, Jonathan.” - Brayan, The Keepers of the Fire