If you are going to use a brace, I would suggest an "unloader" brace. These are manufactured by several companies, and are designed to take the weight off the affected compartment; in your case, the lateral compartment.
Other non-surgical alternatives are visco-supplementation, with hyalurinic acid. I also frequently recommend my patients take Omega-3 fish oil which contains natural anti-inflammatories, and has been shown to decrease symptoms in arthritic knees. Finally, I have also had success using complimentary medicine therapies such as acupuncture.