|Applicable Blender version: 2.49.|
OSA stands for oversampling, also known as anti-aliasing. If you look at the rendering below, you'll find that the one has a rugged edge. It looks like small steps! To stop this, Blender uses OSA to prevent "jagged edges" or "aliasing" as it's called.
This occurs when you have a diagonal change of colour, which results in rough edges. Remember drawing a diagonal line in Paint? To overcome this hindrance of square pixels, a technique called anti-aliasing or "oversampling" is used. It blends the colours around the rough edge to create a smooth, but defined edge. One way of doing this is to by creating the image twice as large, then scaling it down - oversampling. Blender can do this for you if you select an OSA rate. Remember this will take much longer, but results in better renders, so use this for the final product, not while testing. In some cases the scene can seem blurred due to oversampled textures; try changing the OSA setting, or oversampling yourself.
Here's a quick illustration of how OSA changes a render (look at the edges):
OSA settings can be manipulated in from the Render Settings panel.