You can create a removable recovery disk for MacOS X Lion

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Apple releases Lion Recovery Disk Assistant, asserts its dominance over Snow Leopard | Engadget

Resource Links – Apple Support

Apple Lion Recovery Disk Assistant

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Now that Apple are distributing the “Lion” version of the MacOS X operating system in an online manner, you may think of how you may be able to do a bare-metal recovery of your Macintosh computer. This is where the computer has a hard disk on board but it doesn’t have the operating system to work from. This is because there is no physical disk that came with the upgrade which you can install from when you need to reinstall the operating system.

Now Apple have provided a recovery disk program that allows you to create the recovery image on to an external disk like a USB memory key or a USB external hard disk. It avoids the need to reuse Snow Leopard (which may be on an install DVD) in order to download Lion again as part of the recovery process.

Normally, an upgrade to MacOS X Lion would create a recovery partition on the Mac’s system disk. This wouldn’t be good enough if that hard disk crashed. When you run this utility, you create a copy of the same recovery partition on an external disk which you can then boot from during a bare-metal install or system rebuild.

Like the internal copy, this would allow you to do a “ground-zero” OS install, reinstall from a Time Machine backup, use MacOS Disk Utility to check and repair the hard disk as well as use Safari to visit Web-based resources.

When you prepare the Recovery Disk, you would have to create a separate partition (logical disk) on the same USB physical disk which should be greater than 1Gb. As well, the Mac should have a Recovery HD partition created on it during the Lion OS install or upgrade. This is because the Recovery Disk Assistant formats the drive to create the partition. As well, the partition will be hidden from view when you use the file-system utilities like Finder or Disk Utility.

It will come in to play when you have the external disk connected to the Mac and you reboot it while holding down the Option key. Here, the new Recovery partition will be listed as an option in the Mac’s “Startup Manager” boot menu.

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