Apple has released Lion Recovery Disk Assistant, which should help out in the event of a catastrophic hard drive failure.
When Apple release the latest version of its operating system OSX Lion as download only, many wondered how recovery would be possible in the event of an HD failure or replacement.
The Lion installer grabs a chunk of the Mac's primary drive and allocates it as an HD Recovery partition but that won't help if the drive fails completely or you want to install a new primary drive,
Lion Recovery Disk Assistant seeks to solve that problem by allowing users to build a USB thumb drive emergency kit. The download will turn any USB drive with at least 1GB of space into an emergency recovery dongle, but will reformat the drive and erase any data in the process.
It also requires a Lion install with the Apple-instigated Recovery HD, so if you've removed the partition created by the installer you're out of luck.
The Recovery Disk is accessed by holding down the Option key on start-up and will provide enough resources to re-install the OS using the Apple App Store. If you've already paid for Lion and have your Apple ID details, you won't have to pay again.