O'Neill recognises Villa are regarded as underdogs after crashing 7-1 to Chelsea at Stamford Bridge in a Premier League encounter only a fortnight ago.
He admits to initially feeling "despondent" in the aftermath of that mauling - Villa's first league reversal of 2010.
But O'Neill is driven on by the prospect of Villa reaching a second major final of the campaign as much as he is in wanting revenge over Carlo Ancelotti's side.
And he has faith in his normally reliable back four, which boasts one of the the best defensive records in the Premier League this season, to stand up to the threat posed by the likes of Didier Drogba.
O'Neill said: "There is no question that for a few days we were all pretty despondent after the Chelsea defeat.
"Chelsea are a fantastic side and played particularly well against us a fortnight ago.
"They must have derived a great deal of confidence from beating us so convincingly and, from our viewpoint, so disappointingly because we caved in during the last half hour.
"The 7-1 got to me at the time. It was a poor defeat because I've never been beaten by seven goals before and it was hard to take.
"But I've had bigger disappointments and, when I put it into perspective, it was just a rank bad day at the office.
"I thought the performance and result at Bolton last weekend showed we had got over it. It was the manner in which we toughed it out at Bolton which was the most satisfying of all."
O'Neill added: "Overall I've been delighted with the players. We were disappointed at Chelsea but there haven't been too many disappointments this season.
"The opening day of the season defeat against Wigan was, from my viewpoint, when I look back now, more disappointing than the loss at Stamford Bridge.
"Overall, I've been thrilled with the efforts of the team and the players' defensive record this season has showed they are capable of withstanding pressure and they have been excellent for us."
O'Neill is optimistic Villa will not throw away all of their good work this season in the finishing straight as they look to follow up their Carling Cup final appearance.
He said: "You can be going along so nicely, fighting month after month, and then it comes down to March-April when you are contesting big games.
"You can be beaten twice in one week and suddenly you think your season has disappeared.
"We've kept it going until now. We've got six league games left, at least one FA Cup match, and the players have kept going pretty well all season.
"We've played a lot of matches to get to this stage and we wouldn't want to throw it all away now.
"The chance of playing in another final at Wembley is a big incentive for the players to keep things going."
O'Neill is optimistic central defender Richard Dunne and midfielder James Milner will both be fit after recent Achilles problems.
Milner was rested for the win at Bolton but has resumed training this week.
Dunne pulled out of training on Thursday but is expected to be available.