Create a bootable Lion install drive for newer Macs

7. IMPORTANT: Monitor the download's progress. As the progress bar gets near the end, get ready, because once the status reads About 0 seconds remaining, the progress bar will disappear, the installer will spend a minute or two cleaning up, and then your Mac will restart. As soon as the screen goes dark, unplug your external drive. If you wait too long, your Mac will boot into the Mac OS X installer on that drive, starting the installation process. Interrupting that process can leave your Mac unable to install OS X unless you restart it and--I'm not joking--zap PRAM.

8. Once your Mac has booted from its normal startup volume, reconnect the external drive. Alternatively, you can connect the drive to another Mac and proceed with the following steps using that Mac.

9. Open the external drive, and you'll find a folder called Mac OS X Install Data. The important file is the one called InstallESD.dmg, just under 4GB in size, which is a bootable disk image containing the Lion installer. (If the Mac OS X Install Data folder has a "no access" icon, select the external drive in the Finder, choose File -> Get Info, and expand the Sharing & Permissions folder in the Info window. Click the padlock icon at the bottom of the window, provide an admin-level username and password, and then uncheck the box next to Ignore Ownership On This Volume.)

10. If you plan to use the same hard drive for your bootable installer drive that you used to download the installer, you'll need to copy the InstallESD.dmg disk image to your Mac's internal drive, or another drive, before proceeding. Use that copy in Step 12, below.

11. Launch Disk Utility (in /Applications/Utilities).