"Operating System not found" is a BIOS error. What it means is that the system cannot locate the primary drive.
POST is Power On Self Test. This is the memory and BIOS check that the computer goes through when it is first turned on. Newer computers do not show a POST screen, while the self test executes the company logo (Dell, Gateway, whatever) is displayed. Pressing the F2 key at this point will take you to the BIOS setup.
In setup, press F9 to restore BIOS defaults, F10 to save and exit. This will restore the location of the primary drive to the BIOS. (There should be a menu on the BIOS setup screen that tells you what function keys to use for Sony, F9 and F10 are standard on most systems)
No, you're past the BIOS at this point. You'd get a similar error trying to boot a blank formatted diskette.
BIOS has passed control to the bootloader in the Master Boot Record, and the bootloader is complaining that it can't load from the boot partition.