If you want to perform a clean install of Mac OS X Lion instead of an upgrade, or you want to have some recovery media available, just in case, then this is the how to guide for you.
Ok, so the download and upgrade to Lion went well for me, I didn’t have any problems. However, I also don’t want to wait several hours with my slow internet connection if I have to do a recovery or a reinstallation. Also, for the Mac OS X Lion book I am working on I needed to do some screenshots of a clean configuration (for those readers who just bought a new Mac with Lion installed), so I wanted to have either a DVD or a USB stick with the Lion media on.
After reading through various materials, this is the method I used.
If you have already downloaded and upgraded to Lion then the files won’t be there on your Mac as they are deleted once the upgrade has completed. What I did was to recovery a previous backup using Time Machine and then started the process again, only this time I just did the download, I didn’t do the upgrade. If you don’t have a Time Machine backup, you can always do a factory restore and start again.
Step 1
Download Lion from the App Store – remember, DON’T install it!
Step 2
Open up the Applications list and locate Install Mac OSX Lion.
Step 3
Right click on it and select Show Package Contents.
Step 4
Navigate through Contents, then SharedSupport and locate InstallESD.dng.
Step 5
Open up Disk Utility.
Step 6
Drag InstallESD.dmg to the left column in Disk Utility.

How about creating a Clone of Mac boot volume. This can be done using third party Mac cloning tools like Stellar drive clone and CCC.
One ca select to copy other applications as well. I think it is a better and affordable option to create a bootable DVD for Mac Lion.