Here's how to use a free utility, Lion Disk Maker, to create a boot drive for clean installations or emergency use on your Lion- or Mountain Lion-compatible Mac. Create a bootable USB thumb drive like we did, or a bootable DVD.
Lion DiskMaker will open the app contents and find the InstallESD.dmg disk image. You have a choice of creating a bootable DVD or bootable USB stick. I decided to create a bootable USB stick, and clicked the "Create a boot disk" button.