Originally added on to omg to make it seem like the thing being omg'ded was of low likelyhood of happening. The word originated on World of Warcraft when the player deadonsight of the forgotten coast realm screamed it on ventrilo. The word has been coined by many users of many games ever since.
"omgawd, did you just see him one-hit-ko our tank?"
"omgawd, i just got pwned."