If you wish to fly a series of waypoints do not put the GPS in OBS mode. It should be GPS only and NAV in the autopilot control.
From the GPS530 manual that you can down load online:OBS Key – Used to select manual or automatic sequencing of waypoints. Pressing the OBS Key selects OBS mode, which retains the current ‘active to’ waypoint as the navigation reference even after passing the waypoint (i.e., prevents sequencing to the next waypoint). Pressing the OBS Key again returns the unit to normal operation, with automatic sequencing of waypoints. When OBS mode is selected, the pilot may set the desired course to/from a waypoint using the Select OBS Course pop-up window, or an external OBS selector on the HSI or CDI. I hope that explains it for you...it took a while for me to realise and fix to!