OMF is a utility that is built into the Avid Media Composer and Final Cut Pro, (and other non linear systems.) This utility allows for easy conversions from one digital system to another. Avid sequences can be converted into Digidesign Pro Tools sessions.
OMF has come a long way. At one time, you were lucky if your OMF's would open at all, but with newer software on the Avid and Digidesign side, we have had great success. Never use OMF version 1. Some digidesign programs won't even attempt to open these up anymore. EMBED the media into the OMF. It works better. Final Cut Pro Only allows for Embedded OMF's. This is Good!
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