I was chatting with a nurse from another unit recently and she commented on something she'd witnessed in my NICU. She saw one of our travelers feeding a baby - baby seated on her knee and held a distance from the body. She thought this very odd in spite of the travel nurse's explanation: "This baby's a puker and I don't want to wear her formula."
Sounds very reasonable to me - and I often feed babies in a similar position, not always to avoid baby vomit.
Newborns, especially preemies, will generally go to sleep when held close to an adult's body. This is counterproductive when you need the baby to consume a minimum amount of expressed breast milk or formula. The solution is to hold the baby a little distance from your body so your shared warmth doesn't make him drowsy.
It takes a little time to feel comfortable holding babies this way, but it actually gives you better control over the baby's airway than traditional positioning. It also makes it easier to react to choking episodes -- or the aforementioned "puking".
The baby is seated on one of your thigh (varies with handedness of the adult, and baby's propensity to vomit) in a fairly upright position. I generally place the baby on my left thigh with my left hand behind the baby's neck. my thumb and forefinger (middle finger for big kids) are supporting the ears. Heel of hand ring and pinky fingers under the shoulders, Baby's not going anywhere, no matter how much he wiggles and my right hand is free to hold the bottle for feedings and to grab anything else I might need - burp cloth, bulb syringe, suction, etc.
Keeping the baby upright helps facilitate swallowing in sleepy babies and those who haven't entirely managed the suck-swallow-breathe maneuver. If the baby chokes or spits, it takes fractions of a second to put the bottle down and reposition the baby with his head forward and facing down over the right hand. This generally clears the airway, but if it doesn't, I can easily free a hand to grab the nearby bulb syringe or suction as needed.
When I'm burping a particularly spitty baby, I will move him to my right thigh facing away from me and leaning forward onto my right hand. This directs any vomit onto the floor instead of my clothing, making for much easier clean-up.