Following on from providing Lion as a download only install last year Apple today released Mountain Lion (10.8) using the same delivery method. Whatever your feelings are about such a delivery method you would be well advised to ensure you have a bootable version of the OS for future emergency use. Especially important as the installer automatically deletes itself once it has installed meaning a another huge download if you need to reinstall.
Lion DiskMaker is free app created with AppleScript that can be used to create a bootable install disk or burn a bootable image to DVD. Despite the name the new version does work with Mountain Lion.
Download Lion DiskMaker

Lion DiskMaker can be downloaded from the Serial Serveur website at http://blog.gete.net/lion-diskmaker-us/
Install and Run Lion DiskMaker
Once downloaded it’s a simple matter of unzipping the application and running it.
Downloading Mountain Lion

You will of course need a copy of Mountain Lion from the Mac App Store for Lion DiskMaker to create an installer from. If you haven’t already purchased it then now is the time! Alternatively if you have already bought it your next step will depend on whether you still have the downloaded installer.
If you have not yet installed Mountain Lion from the download then you will find it in your Applications folder. If you have already installed Mountain Lion and didn’t back up the download before that installation then you will need to download it again as the original file will have been deleted. No I don’t see the logic of that given the size of the download either 😉
Select OS X Version

As this updated version can make both Lion (10.7) and Mountain Lion (10.8) boot disks you will need to specify the version you want to create.
Locating the Downloaded Installer

As soon as you run Lion DiskMaker it searches your attached storage and if it finds the installer you will be presented with a dialog box similar to this.
Selecting the Installer

In the event you wish to use a different copy click the "Use Another Copy …" button in the previous dialog box and navigate to the location of the file. Click "Choose" when you’re done
DVD or Boot Disk

The next stage is to select whether you want to create a DVD or a bootable disk. I elected to use a pen drive.
Choosing the Disk Type

The penultimate step is to select the drive or device to be used as the basis of your installer.
Choosing the Disk to Erase

Lion DiskMaker will display disks it finds. Select the disk you wish to use,
Create the Installation Disk

Finally it’s a simple matter of clicking the "Erase then create the disk" button and waiting for the process to complete.
Copying Files

Lion DiskMaker starts copying files.
File Copying Progess

As the files are copied the progress is displayed in a Finder window.
Completed

When the copying is complete the installer is displayed in the Finder window
It’s not a complicated process to undertake manually but you might as well save any time you can … all the better spent investigating the options coming today in Mountain Lion!
Elaine, does this mean we can do a ‘nuke and pave’ with Mountain Lion if we so wish?
The versatility of Time Machine and installing OS on top of old OS means I’ve never actually done a ‘nuke and pave’ since Tiger, however I think the time has now come :/
Good news, yes it does!
Mountain Lion does of course have the recovery partition on existing installs but the pen drive approach is essential in the event of a hard drive failure or a new install on an external hard drive.
I test my pen drive by doing an install into a VM in VMWare Fusion. This also gives me a virtual machine to test software on without affecting my main Mac.
If you need a hand just shout 🙂