Built right into OS X Lion, Lion Recovery lets you repair disks or reinstall OS X Lion without the need for a physical disc.
The Lion Recovery Disk Assistant lets you create Lion Recovery on an external drive that has all of the same capabilities as the built-in Lion Recovery: reinstall Lion, repair the disk using Disk Utility, restore from a Time Machine backup, or browse the web with Safari.
You can use a 1GB USB stick to make your own recovery disk too. Plug it in and follow the instructions after launching the Lion Recovery Assistant. Definitely a wise choice to always make backups!