Create a bootable Lion install drive for newer Macs

2. Connect a drive--a hard drive, a thumb drive, or the like--with at least 5GB (preferably 8GB) of free space. The drive must be formatted as Mac OS Extended (Journaled), and must have a GUID Partition Table. Follow Steps 1 through 4 in this slideshow to properly format the drive.

3. In the Mac OS X Utilities window, click Reinstall Mac OS X and click Continue.

4. On the Mac OS X Lion screen, click Continue. You'll see the message, "To download and restore Mac OS X, your computer's eligibility will be verified with Apple." Click Continue, then click Agree (twice) on the next screen to agree to the Lion license agreement.

5. Select the drive onto which you want to install Lion. The important thing here is to select your external drive.

6. Click Install to begin the download. Depending on your Internet connection, the download can take anywhere from under an hour to several hours (or even, if you're unfortunate enough to be on a very slow connection, considerably longer).