HOWTO create a bootable USB installer for Mac OS X Lion

Here are instructions for doing this in the Terminal. (Other answers you find are out of date, as they change every time Disk Utility’s UI changes, which is a lot.)

Before you begin, make sure to partition the USB drive as GPT and format it as Mac OS Extended (Journaled) (aka JHFS+).

Make a copy of the installer dmg:

$ cp "Install Mac OS X Lion.app/Contents/SharedSupport/InstallESD.dmg" ~

Scan the image to make it ready for restore

$ asr imagescan --source InstallESD.dmg 
Checksumming partition of size 0 blocks...done
Checksumming partition of size 4 blocks...done
Block checksum: ....10....20....30....40....50....60....70....80....90....100
successfully scanned image "/Users/paul/InstallESD.dmg"

Restore the image to as USB drive

$ sudo asr --source InstallESD.dmg --target /Volumes/Untitled --erase --noprompt 
	Validating target...done
	Validating source...done
	Retrieving scan information...done
	Validating sizes...done
	Restoring  ....10....20....30....40....50....60....70....80....90....100
	Verifying  ....10....20....30....40....50....60....70....80....90....100
	Restored target device is /dev/disk6s2.
	Remounting target volume...done
asr: Couldn't personalize volume /Volumes/Mac OS X Install ESD - State not recoverable