I've actually installed all my updates by hand and never done the OTA updates. I don't have an Optimus around any more so I can't test how the OTA update is installed, whether done via Android, Recovery, or some combination. I believe it is done via Recovery with Android placing the update file in /cache and communicating it to the Recovery via one of the partitions, but I really don't have an Optimus to test any of this with, so that is all I can give you. I think it will not update with Xionia recovery installed and signature verification enabled, but I cannot tell you for sure.
As to ROMs, you should try them out. The popular ones that work with ZVD are Reborn and CM7.