I have done installs on a LOT of 2850's, and here are some possible suggestions based on what you said or didn't say in your post: Make sure that you have the USB ports turned on under Integrated Devices and Emulation set to Auto.  Also, make sure you have the USB key IN THE SYSTEM when you boot to the BIOS to change the boot order.
  I was just recently given some PowerEdge 2850 servers and need to install Windoes 2008 on them.  They do not have DVD drives so I made a bootable USB thumb drive.  I have been able to use the thumbdirve to install Windows on other machines, but I am not able to get these 2850's to even attempt to boot to the USB drive.   I have gone into the BIOS and set the USB Controller to 'On with BIOS support'.  I've tried each of the three available USB Emulation types and none seem to work.  Also, I have seen some web pages that describe that the USB drive would appear the boot sequence selection, but it does not. Any suggestions? Alex
PowerEdge 2850 Boot to USB