Operation Flashpoint: Dragon Rising and Arma II are the current and only real contenders for the king of the military simulation genre, with one distinction being that Operation Flashpoint is available on consoles now while Arma II is currently not, and this being a genre which typically appeals more to the sim-crazy PC gamer crowd, that might not mean a whole lot in terms of lost sales.
At this point Im undecided on buying either game. When Arma II came out to positive reviews I almost got it, but the lackluster demo with its subpar voice work, glitches, and impossible to control helicopter didnt quite convince me to buy it. Couple that with the fact Codemasters was releasing its game only a few months later, and I figured I would wait and see how the whole thing shaked out. At this point it appears to be a draw, because they have gotten very similar review scores and oddly similar reviews, with the primary distinctions being that Operation Flashpoint DR appears to have shipped relatively bug free, and the PC version is priced at a very friendly $40 (the 360 version of OP: DR is $60 and Arma II is $50 on Steam).
The guys over at CVG posted an interesting review of Operation Flashpoint DR where they explicitly compared it to Arma II. The differences between the two games are subtle but important: Arma II is the more graphically impressive and technically advanced game, it has larger battlfields, more weapons and vehicles, bigger multiplayer servers, and more custom scenario editing features. It also has a ton of bugs in the single player campaign, glitches with the voicework, and requires a beast of a computer to run. Operation Flashpoint DR is slightly more accessible and polished; the missions are better scripted and more straightforward, the battlefields are smaller, the servers are smaller, and the graphics arent quite as impressive, but at the same time they are much less demanding on your PC than Arma II and they scale well to older machines. Its quite clear that while the two games are similar, OF:DR is the more fully baked pie right out of the oven, even if its a smaller and slightly less ambitious project. Both games are hardcore military sims; Arma II is just slightly more so.
The thinking mans alternative to something like Call of Duty Modern Warfare or Battlefield 2, both these games are very realistic and unforgiving in their design. One bullet can kill you, the vehicles and guns have highly accurate physics models, the missions can be extremely long, progress at a snails pace and require tons of teamwork, proper planning and pinpoint execution. These arent your "run N gun" adrenaline fests with epic cutscenes that sell ten million copies; they arent even aimed at a general audience, more at enthusiasts. That being said, they offer a level of military realism and battlefield immersion thats unparalleled - if you can handle it.