I just talked to the Apple team here in San Francisco. The word is there currently are no plans to produce discs with Lion. There will also no longer be any install/restore/utility discs included with new computers. The Apple rep was not clear on where those utilities would exist. He suggested that he'd read somewhere in the Lion documentation that various apps and utilities that were previously on discs would now be accessible via key commands and an internet connection which would allow the OS to access the Apple servers.
But as any network admin knows from unfortunate experience, you cannot always get a machine to behave exactly the way Apple anticipates.
So for now, if you're trying to upgrade to Lion from a legacy OS (anything older than Snow Leopard) you have to purchase a SL disc from Apple in order to attain the coveted Mac App Store from which you can download Lion.
It's very forward thinking, but many of us live in the present - as do software developers who may hinder the progress of adopting new OSes due to incompatibilities.
As a side note, there are already many threads with users reporting problems downloading and installing Lion from the App Store. I would expect as much on day one, but knowing that we have no alternative for an install, I feel less confident rolling this out across our company network.