The sequence in the
Installation and Patching guide is correct.
Make sure you identify the correct game - IL-2 Sturmovik is a 1 CD game.
Forgotten Battles comes in different flavors; If you bought the Gold edition make sure you install all cd's (3 I believe). The normal edition is 2 CD's om top of which Ace Expansion Pack can be installed. (also 2 CD)
Install FB (2CD)- run game (V1.0)
Install AEP (2CD - EDIT: 1CD)- run game (V2.0)
Install Patch 2.01 - run game (V2.01)
Install Patch 2.04 - run (V2.04)
You just completed your first patching course. congratulations and welcome to a realy great game/flightsim that will give you years of joy - within a couple of weeks you'll be hopelessly addicted though
run il2setup
Have fun playing...
The Gold pack (3CD) will bring you to V2.0 direct
Once the game starts with V2.0 you can just take it from there Patch to 2.01 (then run game) then to 2.04 (run game again)
AEP can not be installed as stand-alone. you need FB installed first. Just see it as a glorified "Patch 2.0"

There's so much in it it deserved a CD status

IMHO 2.04 still has one of the best flight models in the series
I never used PaintVictories, but I assume you just run it in the background and shoot some AI down (may take a while), maybe a re-download can help to get at the help.