I'm currently failing to install Lion, since it gets as far as the restart stage, and (from what I can gather) is attempting to create a recovery partition, fails, and thus doesn't install.

All workarounds I've seen so far seem to indicate that I need an external device of >13G which must be formatted in the process (making me exceptionally nervous about trying to repartition my current USB external backup disk)

So yeah, it's still not perfect.