Reinstalling Everything after HD Replacement I'm about to replace my iMac's HD (250GB to 1TB). I'm planning to create an image of my disk right in m Time Capsule, and after the transition I need to clone the HD back.

Unfortunately Lion has no DVD, and I'm not sure if I should create one. Can I use my Snow Leopard disk to boot, and clone the Image to the new HD? Will the Time Capsule (which is connected via ethernet) be visible, and what about the difference between the image and the new HD in size? So, I'm not sure if it will work.

Another option would be to use the Time Machine backup to restore, but I'm not sure if I would trust it.
You can do this with Time Machine, but there is another method, if you have the equipment. Instead of Time Machine, use a shareware disk cloning utility. I use Carbon Copy Cloner.

If you are paying someone to swap out the hard drive in your iMac, ask them if they can do the following for you. 

Don't erase your main hard drive just yet. Take the new hard drive that you are going to install in the iMac and put it in an external enclosure that uses USB or FireWire, and connect it directly to the iMac. Use Disk Utility to make sure it is properly formatted to make it a bootable Mac OS X volume. Install Carbon Copy Cloner on Mac OS X on your main hard drive and us it to completely clone that drive to the external drive. Check the Carbon Copy Cloner settings to make sure that it will create a bootable duplicate drive.

Then you can remove the new drive from its enclosure and install the new drive into the iMac and boot it up.