There are many ways in which you can install Mac OS X Lion 10.7 on a compatible Mac computer once downloaded from the Mac App Store. You can archive the downloaded file and create a bootable OS X Lion DVD or even install the OS on a separate partition on the same computer running Snow Leopard. However, for installation on Macs such as a MacBook Air with no optical media, it is also possible to create a bootable USB flash or external hard drive using the downloaded OS X Lion installer file. We show you how easily its done!
Once you have downloaded the OS X Lion installer from the Mac App Store, navigate to the folder containing the installer then right click on it and select “Show Package Contents”.
Now open the “Contents” directory and go into “SharedSupport”.
You will see “InstallESD.dmg” inside. Double-click it and it will mount the Lion disk image onto your Mac desktop.
Now plug your USB flash or external hard drive into the Mac and open up Disk Utility from the Utilities.
Select your USB drive from the left side and click on the “Erase” tab while making sure you choose “Mac OS Extended (Journaled)” as the Formatting option.
Once the format completes, right-click on the USB drive in Disk Utility and select “Restore”.
Just drag and drop the already mounted “Mac OS X Install ESD” image into the “Source” field and hit Restore.
Thats it, your bootable Mac OS X Lion USB installation drive will be ready once the restore is completed!
You can now install Mac OS X 10.7 Lion on any compatible Mac with this USB drive. Simply plug it in, hold down the Option key during boot and select the Lion formatted drive to begin installation.OSXDaily]