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.
Thanks for this brilliantly simple strategic tip!
For those upgrading to Lion via a new Mac, are there any issues you're aware of regarding acquisition of InstallESD.dmg? I note that as of mid-July, according to Dan Frakes, a volume created from the downloadable Lion installer "will not boot a 2011 Mac mini or 2011 MacBook Air, which ship with a newer version of Lion preinstalled."
Will the Mac App Store version of Lion continue to be simply 10.7, updatable via Software Update, or will it periodically be bumped up to a later point release, as with retail versions of a given reference release back in the days of physical OS X media?
dkmarsh—member, FineTunedMac Co-op Board of Directors
