Installing a Lion Vm within Mountain Lion I have a few issues with Mountain Lion that mean I need to have occasional access to a Lion installation.  I have bootable clones of my old Lion install before I upgraded, but sometimes I only need to run a single application and rebooting from another disk is a pain, so I would like to be able to fire up an instance of Lion as a virtual machine.

The Lion license allows for VM installs (up to 2 I think), so there should be no issue from a licensing perspective, but I don't know how to go about actually doing it.

I have access to Parallels 7 (although I have never used it, got it as part of a software bundle recently), and I would happily use VirtualBox if that's the easiest way.  I have seen a few tips for creating ones within VMWARE, but I don't have access to this software.

So, starting from a point of having access to the Lion download, having the installer image within that download extracted onto a USB stick, and also have a bootable copy of a working Lion image, what is the simplest way to get a clean minimal Lion install working within either Parallels or VirtualBox on Mountain Lion?
OK, having had a good play the following options are possible with Parallels:


From the Recovery Partition on your machine, however this only works from the current one, not any other attached ones, so if you are booted into ML, you can only use the ML recovery partition - so no go for Lion
From original Media, in this case an official USB stick as it was not available on DVD, I didn't have one, so no good for me (note that hand made ones will not work, neither will if you created a bootable partition
From a Disk Image file.  As with option 2. above, creating a bootable DVD/USB Stick/partition on an drive etc will not work if you have extracted the image file to create one.  You need the actual DMG file.  If you have the original App Store download, the easiest way to get this is is to rick click and Show Package Contents, then find the InstallESD.dmg file and make a copy of it.


Using the file from method 3. will allow you to use the new VM Wizard to create the Lion VM