I obtained the image from here.
I used a Solaris system (2008.11) (running in a virtual machine) for flashing. I had to attach the USB device directly to the virtual machine instead of using it as a disk. That way it is actually recognized by Solaris as a USB device and usbcopy works.
wget http://genunix.org/distributions/indiana/osol-0906-x86.usb /usr/bin/usbcopy osol-0906-x86.usb
usbcopy seems to be a wrapper for dd, fdisk and grub. However, it seems like they are Solaris-specific.
Bad PBR sig at boot. Couldn't figure out how to circumvent this. With my USB stick approach.
Apparently it's possible to install OpenSolaris using a USB connected CD drive. I don't have such a drive and haven't had time to get one. Once I get to it, I'll update this page. (Comments and suggestions on the subject are welcome.)