How does the Mac OS X Lion beta work? Apparently you download it from the Mac App Store, but I don't understand how that would work, because it's not an app.

Can a developer who has installed it explain the process to me?
I did it. (Apple Developer).

I have a second computer that I use for all beta testing, running OS X 10.6.  I used the app store on that computer to download the Lion Beta Installer.  It downloads and installs just like any other app.  You then run the Lion Beta Installer app and it reboots and installs Lion as if it came off a CD.  After another reboot, you are running Lion, with all your apps and settings working just fine.

Hope this does not defy the NDA.