I recommend not getting the Omnia. Although it is highly modable and has many features, it is just too slow. I'm stuck with one until I can afford a new phone...
I've installed Vista and 7 many times from USB. I didn't use that tool though in the link I provided so I can't really vouch for that. I can't seem to find the tutorial I used but that one seems much easier.
Here you go:
http://www.intowindows.com/how-to-cr...7-dvdusb-tool/
You're going to need an iso image of the windows 7 install disk though, since you don't have a DVD drive to read it.
I have one and it does the same thing. I think it's the optical port turning on or something. I'm not really sure but it's probably nothing to be worried about.