Creating this recovery drive will only give you the same options as the built in Recovery system in Lion (accessed by holding cmd + R on startup). To reinstall Lion, you will still need to download it from the recovery system.
The following steps will erase all data on your USB drive. Make sure to backup data first.
- Download and run the Lion Recovery Disk Assistant.
- If prompted when opening the file, click Open.
- Click Agree to accept the license agreement.
- Connect a blank USB drive to the computer. If it is not blank, then all data will be erased.
- Once it appears, click on the drive that you want as it appears in the application.
- Click Continue.
- You will be prompted for your password. Put it in if you have one and click OK.