The hosts surrendered a half-time lead given to them by Shane Long as Serbia inflicted upon O'Neill his first defeat since replacing Giovanni Trapattoni.
Despite the result, O'Neill was happy with many aspects of his side's display.
He told Sky Sports 1 HD: "I was pleased with a lot of aspects of the game. We started off very, very brightly and we had a goal disallowed. Then we got a really good goal.
"We could have made it 2-0 and at this level, that would have been big for us.
"We probably started a little hesitantly in the second half but we had good moments in the game against very decent opposition. There was lots that I was very pleased with."
Long accepted after the game that his contribution would probably be remembered by most for the two glorious chances he missed. O'Neill admitted he was surprised that the Hull striker did not dispatch at least one of those opportunities.
"I thought it was a terrific goal he scored. With that confidence I probably expected him to take one of the other two chances he had.
"The one in the first half to make it 2-0 would have been a big moment for us, but these things happen. But there are definitely positives there to take out of the game."
Long was keen to make an impression in the absence of record goalscorer Robbie Keane and O'Neill did not feel that the LA Galaxy striker was badly missed.
"If you would have said before the game that we would have created those clear-cut chances - they were brilliant chances - I would have been pretty pleased," he said.
"Of course, there is always room for a goalscorer like Robbie, but I'm very pleased indeed."