Norwegian vowels

O and aa is pronounced a bit different. I would recommend you to registrer at http://www.livemocha.com  to take the norwegian course they have there. It is actually pretty good.

å/aa is very similar to the pronunciation of the Japanese sound お, O is a bit more tricky and can be pronounced either the same as å/aa or somewhat similar to the "O"s in the English "moo" (as in the sound made by a cow). But is better to actually get to hear the difference than reading an explanation, the most important thing to remember is that O is sometimes pronounced the same as å/aa and sometimes not.

i and y are indeed very similar in pronunciation. The difference is pretty much that i is the same as い while y is the same sound pronounced while pouting one's lips. People may notice if you mix up the sounds, but I can't imagine that it's that bad. Everybody have their own pecularties when it comes to pronunciation, and sometimes mixing up y and i falls into that category in my eyes.