We’ve seen some issues with Lion installations, particularly regarding the creation of the recovery partition. If you use a non-standard disk format (such as case-sensitive HFS+), have multiple partitions, or even Boot Camp, you’ll have issues installing Lion. In most cases, you’ll have to delete the Boot Camp partition from your machine so that Lion can repartition your drive. Only then can the recovery partition be created. If you have a Boot Camp partition, odds are you’ll need to remove it in order for the Lion installer to create the recovery partition.
The recovery partition, installed with Lion, can be accessed by holding down the Option key immediately after powering on your computer. The boot manager will be visible, and you can click on the item clearly marked “Recovery Partition.” Alternatively, you can turn on your computer while holding down the Command and R keys. For more information on the recovery partition, see Apple’s documentation.