To make a bootable USB disk with the Mac OS X Lion installer, the guides I found are much too verbose for my taste, and have too many cute screenshots and ads. Here is a summary for the impatient.
The downloaded installer image is deleted after install, so copy it before installing.
The installer disk image can be found in
Applications / Install Mac OS X Lion.app (right-click -> Show Package Contents) / Contents / SharedSupport / InstallESD.dmg
- Open InstallESD.dmg. You get a "Mac OSX Install ESD" disk on the desktop
- Partition and format the (8 GB.) USB key as standard Mac OSX Extended with journal. (The partition table defaults to MBR for USB drives; that's OK)
- In the "Restore" tab of Disk Utility:
- the source is the mounted image on your desktop: "Mac OS X Install ESD" (NOT the .dmg file)
- the destination is your new USB Mac partition (not the drive itself)
Other instructions suggest using the InstallESD.dmg file as the source, and the USB key itself (not the partition it contains) as the destination. That may work too. Just don't mix both methods. I had tried that and failed, but maybe it was because I had first made a GPT partition table instead of MBR?
If you only have a 4GB key, it seems to work using Carbon Copy Cloner and de-selecting all unneeded language packs. But I haven't tried an install from such a key.