Well, it's certainly very unoptimized, much as ArmA was, but I actually believe ArmA II is worse than it's predecessor, which is pretty sad but seem to be a continuing trait from BIS in this new product line. This is pretty interesting.
But even more important is the low performance: Even on overclcoked highest-end hardware (Core i7; 12 GiByte RAM and a GTX 285 with 2 GiByte VRAM) ArmA 2 becomes a slide show (less than 15 fps) running at 1,280 x 1,024 pixels with very high details. You have to go to low or medium details and have to activate Pixel Doubling (which is ugly) to get playable framerates. Given the performance you shouldn't even think about Anti Aliasing, but the Real Virtuality Engine doesn't support it, as well as any SLI or Crossfire modes, anyway.
This impressive visualization is ruined by the bad LoD and the aggressive Streaming system as well as the post processing effects: The extremely exaggerated Motion Blur can be dealt with, but the Depth of Field which comes into effect in a short distance doesn't just soften the environment but also opponents who are more or less made invisible by that - so lower details are much better from a gameplay related point of view. Biggest drawback: Even on a graphics card with 2 GiByte VRAM ArmA 2 loads high resolution object textures at a very late time. Thus it is possible that a wooden box is made of a washy bitmap and until you get close enough you don't even recognize that the brow something is supposed to be a wooden texture. At closer distances on the other hand the textures are sharp and coherent. The animations are convincing and alarmingly realistic in some situations - especially those of the NPCs, who by the way are quite details except the faces.
ArmA 2 looks great in most parts, but the impressive graphics can't be run on any system at the moment - the performance is a disaster. To get the framerate to an acceptable level you have to lower the visual quality because of what the graphical experience suffers. The clipping bugs and the collision detection are further drawbacks. On the other hand the SSAA feature is unmatched by any other game at the moment.