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).
12. Drag the InstallESD.dmg disk image into Disk Utility's left-hand sidebar.
Now you've got the latest Lion-installer disk image, and you're ready to use that image to create a bootable installer drive or disc. As a bonus, the resulting Lion-installer drive should boot and support any current Lion-capable Mac. However, be aware that when Apple releases new Mac models, those models will come pre-installed with a newer version of Lion, so your installer drive won't work with them. (At some point, Apple will update the Lion installer on the Mac App Store to support those newer Macs, so you can then download the updated installer and make an updated installer drive that supports even those Macs. And so on...)
The next steps depend on whether you want to create a bootable hard drive or flash drive, or a bootable DVD. I recommend a hard drive or flash drive; a DVD will work, but it will take a long time to boot and install. And, of course, depending on your particular Mac model--I'm looking at you, MacBook Air and recent Mac mini--you may not have an optical drive.
To create a bootable hard drive or flash drive
1. In Disk Utility, select InstallESD.dmg in the sidebar, then click the Restore button in the main part of the window.
2. Drag the InstallESD.dmg icon into the Source field on the right.
3. Connect to your Mac the hard drive or flash drive you want to use for your bootable Lion installer. As with the drive used to download the installer, this drive must be at least 5GB in size (an 8GB flash drive works well) and it must be formatted with a GUID Partition Table.
4. In Disk Utility, find this destination drive in the sidebar and then drag it into the Destination field on the right; if the destination drive has multiple partitions, just drag the partition you want to use as your bootable installer volume. Warning: The next step will erase the destination drive or partition, so make sure it doesn't contain any valuable data.
5. Click Restore and, if prompted, enter an admin-level username and password.
To create a bootable DVD
1. In Disk Utility, select InstallESD.dmg in the sidebar
2. Click the Burn button in the toolbar.
3. When prompted, insert a blank DVD (a single-layer disc should work, although you can use a dual-layer disc instead), choose your burn options, and click Burn.