You can purchase Lion on a bootable USB drive straight from Apple at the steep price of $69 ($40 more than the $29 download from the App store). So what if you've already purchased and installed Lion, but want to have a backup disk in case you need to reinstall the operating system? Here are 3 different ways of creating your own Lion recovery disk.
Lion Recovery Disk Assistant - The official Apple recovery tool is Apple's way of creating a bootable USB recovery drive. It's required that you already have OS X Lion running on the computer you're trying to make the disk on and that you have a USB drive with at least 1GB of free space. This method doesn't actually create a complete version of Lion on the USB, but rather it creates a bootable recovery mode so you can reinstall Lion over the air. This means you would download the 4GB Lion install over the internet every time you want to reinstall Lion. It's certainly not the most efficient or quickest way to backup Lion, but apparently it's how Apple wants you to do it.
Disk Utility - Out of the 3 on our list, this method of creating a recovery disk is the most successful and complete in my experience—however it is also the most time consuming. It requires you to have an 8GB USB drive and you need to create the recovery disk manually using Disk Utility. You can also use this method if you want to create a recovery DVD or SD Card. This method holds the entire Lion install on the USB, so you can use it to do clean installs on other Macs rather than having to download Lion on each machine.
Lion DiskMaker - Lion DiskMaker is like a combination of Apple Recovery Disk and using Disk Utility. It's an application that walks you through creating a recovery disk, and doesn't require much work. It uses less disk space, so you only need a 4GB USB drive. Despite it's smaller size, it still contains a complete Lion install so you can use it to do clean installs on other machines. I did have a few problems with creating a recovery disk the first time around and one should note that this is a third-party software.