But Milner helped to inspire a revival with another superb showing in the centre of the park as Blackburn wilted after the sending-off of Christopher Samba for bringing down Gabriel Agbonlahor in the box.
Milner scored that penalty and Stephen Warnock, a Steven Nzonzi own goal, Emile Heskey, Agbonlahor and Ashley Young completed the scoring for the home side.
O'Neill said: "Milner was sensational. He is a character-and-a-half and his game has reached a new level. There is no question about that.
"He is seeing the passes, moving into positions even though he hasn't played central midfield even 15 times yet.
"I think that is his position. He has moved his game on again. He gets into shooting positions as well.
"He said himself at the start of the season that he could score more goals but sometimes you have to be in a certain position to do that.
"If you are wide and crossing things in, it is hard obviously. His overall game from centre midfield has been fantastic."
Skipper Stiliyan Petrov also highlighted the fighting spirit of this Villa team by defying an Achilles problem to lead them to a first final in 10 years.
O'Neill said: "Petrov came over and said he was having a problem with his Achilles. It was a bit more than a problem because he had to get injected at half-time.
"I was delighted with his performance considering I didn't think he would see a minute after half-time at all.
"His overall performance and leadership helped us enormously in the game and I am as delighted for him as I am for anyone."
The Villa fans were less then enamoured with their side's uncertain start to the game and O'Neill believes they must be more tolerant.
He said: "The crowd have to learn to stick with the side and they cannot get frustrated.
"We have gone 2-0 down and normally speaking that might be out of sight.
"But these players are capable of fighting back - and it is better if the crowd stay with them.
"I understand their anxiety and frustration at times but you have got to stick with these players because they can play."