I actually find all of these options unsatisfactory.
Option #1 assumes the hard drive still works. A recovery partition is utterly useless in the face of a hard drive failure, as I discussed in Virtual1's thread. Sure, you can buy a new hard drive to replace the one that failed...
...but then you have no OS media and so no way to reinstall.
Option 2 requires that every computer user go out and purchase a second hard drive to use as the Time Machine backup. And even then, if your primary hard drive fails, you're just as buggered as you re in Option 1--ok, so you have this wonderful non-bootable Time Machine backup. So what? What do you do now? Without install media, you can't reinstall the operating system on your computer so you can't use the Time Machine backup.
Option 3 doesn't help at all. If you can't get an operating system onto your computer, you can't use the App Store.
So, if your hard drive fails, and you don't have installation media...now what?
Re-think option 2. If you
don't go out and buy an external disk for backup, you're eventually going to be screwed anyway.
Not backing up is not a reasonable option.
What I did was use SuperDuper to clone the InstallESD.dmg image onto my TM backup. (When SuperDuper makes a clone, it will carefully step around any TM backup on the destination volume, leaving it unscathed. The result is a single volume that is
both a TM backup and a Lion Install disk.)
That makes your TM backup bootable. It doesn't boot into your latest (or indeed, any) snapshot. It boots into the Lion installer. One of the install options is to recover from a TM backup.
I took the time to test this thoroughly. It can install Lion onto a blank disk, and then use Migration Assistant to recover user files. Or it can restore any particular TM snapshot onto any volume, even a blank one. If the snapshot you restore from was from when you were running Snow Leopard, it (the Lion installer!) will happily reinstall that copy of Snow Leopard. If the snapshot you restore from was from when you were running Lion, and you're restoring onto a blank volume, it'll happily carve out and initialize a matching Recovery HD partition adjacent to that volume. (And, if you're restoring Snow Leopard to a partition that already has Lion on it, it'll reclaim that Recovery HD partition, reabsorbing it into the now-Snow Leopard partition.
In short, it just works, doing whatever you want in the way you would expect it to work.
Now, admittedly, if your main drive has died, you won't be able to restore onto it. You'll have to buy a new drive to replace the dead one, but that's just the way it is. You can't really fault Apple for that.
And, the fact that you still can't just boot from your backup disk and be up and running, without the delay of restoring onto a new disk, is also to be expected, if you think about it. A bootable clone is a useful kind of backup to have, but you'd be insane to rely on that as your only backup. The moment you actually boot off your only backup, you have no backup, and running without a backup is just crazy. Even if you have a bootable backup, the only thing you're going to do with it in an emergency is to immediately clone it again, and we're talking about the same delay as if you restored from any other kind of backup.
But of course, you wouldn't rely on only one method. You'd use #1
and #2
and #3
and:
Option #4: Internet Recovery. If your machine shipped with Lion, then it has in firmware sufficient recovery logic to establish an internet connection and net-boot off a recovery partition on one of Apple's servers. From there, you can install the latest version of Lion, even onto a completely blank disk. It'll even initialize the disk for you, in case it's not already GPT/HFS+(Journaled), and re-create the Recovery HD partition, so you won't have to use Internet Recovery every time.
