A basic diagram of the location of the OMS pods is provided below:
You have to hand it to NASA though on this one - at least they caught this problem. I think it shows that new inspection routines are critical to the future operation of the shuttle:
The astronauts noticed the protruding blanket on the left-side Orbital Maneuvering System rocket pod during a routine post-launch inspection late Friday. John Shannon, chairman of NASA's Mission Management Team, said late today "there's not a great deal of concern over it right now, but there's a lot of work to be done and we'll do that in the coming days."
That comment by John Shannon is more Manager speak than anything else.
Keep everyone calm. Don't say anything you don't need to.
It's not an issue. We're just seeing if it's an issue. No need in causing panic over something that may be nothing.
My reading of this situation is that this type of failure does not have a whole breadth of analysis done behind yet. The only real thing that NASA knows is that similar failures have happened in the past without disastrous results. That's why NASA is doing it's homework at this point. They don't know. They're doing CFD's and computer analysis like nuts right now most probably to figure out exactly if it is a problem.
Though again - kudos do whomever developed that inspection procedure. It's obvious that it was needed.