Someone had this problem at the 100 ML this past weekend, so I figured I would post it here.  I am not sure if it still occurs in the 1.2 patch or not, but here it is anyway.

Found it here:  http://www.innercircleco.com/modules.php?name=Forums&file=viewtopic&t=253
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There is a problem with the new 1.12 patch having it require 3 GB on your C drive (system drive).
People have come up with a definite solution to it.

Run regedit

Go to HKEY_LOCAL_MACHINE\SOFTWARE\MICROSOFT\WINDOWS\Curr entVersion

Do not expand CurrentVersion node, just highlight it.
Find ProgramFilesDir variable in the window on the right side of the screen.
It will point to your program files directory (usually "C:\Program Files").
Change that path to folder on a drive that has enough space to patch BF2. Close regedit (this will save changes) and run the patch. After the patching is finished open regedit again and restore the previous value to the ProgramFilesDir (don't forget to do it - your system may become unstable if you won't).

Proven to work.