Correct. Apple crippled the boot process for windows sadly to the old style IDE mode with a max 4 total devices. You can modify this after you have setup windows 7 so windows will see your SATA optical.
oooooooooooooohhhhhhhhhhhhh. snap. that fits occam's razor and everything. Suddenly solutions come within reach.
Ok so on the topic of the USB boot thing. I assume that on snow leopard i have to modify that file in the resource package to force it to allow me to do a usb key install? Beyond that is there a precise walkthrough/guide for doing this. Because I tried yesterday with an 8 gb microsd card in a usb adaptor as described and the damn thing will not see it. I also issues with rEFIit that the guide recommended to install.