Apple has made the installation process for Lion slightly different than it was for previous versions of OS X. But even with the differences, you can still create a clean installation of Lion on an internal drive, a partition, an external drive, or a USB flash drive.
In this step-by-step article, we're going to look at installing Lion on a drive or partition, either internally on your Mac or on an external drive. For those of you who want to create a bootable USB flash drive with Lion installed, we have two methods you can use, which we will cover in a separate article.
What You Need to Install Lion
The Lion installer. The Mac App Store is the only place to get a copy of Lion. You must have Snow Leopard (OS X 10.6.6) or later installed in order to use the Mac App Store. This seems to be the only reason you must have Snow Leopard installed. Once you purchase Lion and download the installer, you can copy the installer to any Mac that meets the minimum hardware requirements and install Lion, even if that Mac isn't running Snow Leopard.
The Lion installer will be downloaded to your /Applications folder, and is called Install Mac OS X Lion. The installer is just under 4 GB in size.
A drive or partition with at least 8 GB free. You can install Lion on any internal drive, including SSDs (Solid State Drives). In addition, you can install Lion on any external drive that is connected to your Mac by USB 2.x, FireWire 400/800, or Thunderbolt. eSATA-based external drives probably won't work as bootable installation destinations because most add-on eSATA controllers don't currently support booting OS X.
8 GB of free space to install Lion. Apple lists 8 GB as the minimum, but my personal recommendation is a minimum of 60 GB; this assumes you have a second drive somewhere to store user data.
650 MB of free space for Lion Recovery Partition. The Lion installer creates two partitions, one for Lion and one for recovery tools. You can use the Recovery Partition to repair drives, fix permissions, and format drives, as well as reinstall Lion, if needed. The Recovery Partition includes a bootable system with Disk Utility.
With everything ready, let's start the installation process.