OK, to recap.... The first thing you need to do is read the readme files. I know thats obvious but the solution to most problems are found there.
http://www.flashpoint1985.com/cgi-bin/ikonboard301/ikonboard.cgi?s=3da5a57141f1ffff;act=ST;f=47;t=20037This is a gppd place to start. I wrote it a while ago.
Main thing is unzip the viewer into c:\ (or d:\, e:\) depending on your system.
You can install the O2Light somewhere else, thats not important. For instance mine was unzipped to c:\games\operation flashpoint\oxygen.
Now, insert the Original CWC CD into your CD drive and start up Oxygen. You will have to set up a few things in FILE OPTIONS before you can import textures.
From memory go to FILE OPTIONS, double click on viewer and select the buldozer.exe. Then in the bottom of the window you should see a textbox, enter -window -noland -dx as file attributes.
There might be more to do here but Im away from O2Light atm so I can't tell you - it will be in readme though.
Now, exit and restart O2. The viewer should start, if you see a green ground with normal OFP sky then its working. Start modelling
If not try the flashpoint.cfg method detailed in the above link.
I can load textures - gifs, tga and pa* from any location so texture path should not be a problem but if in doubt work in the root directory - C:\
Cyclops - if this does not help plz reply detailing your particular problem