An error occurred while preparing the installation. Try running this application again.

The system places the Lion installer automatically in the applications folder after the download was completed.

That depends on from where you get the Lion Installer. In academia or enterprise settings this needs not to be from the App Store. I had placed mine first on the desktop and got exactly the same error message as the OP had obtained. After moving it to the Applications folder, everything ran fine.

Fair enough, I'm attempting to burn it to DVD and install from there now. I'd also like to add that it was installed to my /applications folder. So thats not helping either.

I'm doing some reserach on what this means, but i know this error log means something to somebody on here. Here is the dump of the error log.

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Jul 25 03:53:17 Scott Install Mac OS X Lion[2059]: Blessing / -- /Mac OS X Install Data

Jul 25 03:53:17 Scott /Applications/Install Mac OS X Lion.app/Contents/Resources/InstallAssistantTool[2065]: Blessing Mount Point:/ Folder:/Mac OS X Install Data plist:com.apple.Boot.plist

Jul 25 03:53:17 Scott /Applications/Install Mac OS X Lion.app/Contents/Resources/InstallAssistantTool[2065]: ***************************** Setting Startup Disk *****************************

Jul 25 03:53:17 Scott /Applications/Install Mac OS X Lion.app/Contents/Resources/InstallAssistantTool[2065]: ****** Path: /

Jul 25 03:53:17 Scott /Applications/Install Mac OS X Lion.app/Contents/Resources/InstallAssistantTool[2065]: ****** Boot Plist: /Mac OS X Install Data/com.apple.Boot.plist

Jul 25 03:53:17 Scott /Applications/Install Mac OS X Lion.app/Contents/Resources/InstallAssistantTool[2065]: /usr/sbin/bless -setBoot -folder /Mac OS X Install Data -bootefi /Mac OS X Install Data/boot.efi -options config="\Mac OS X Install Data\com.apple.Boot" -label Mac OS X Installer

Jul 25 03:53:21 Scott /Applications/Install Mac OS X Lion.app/Contents/Resources/InstallAssistantTool[2065]: Bless on / failed

Jul 25 03:53:21 Scott /Applications/Install Mac OS X Lion.app/Contents/Resources/InstallAssistantTool[2065]: Couldn't bless the installation disk: /

I've tried installing it from the applications folder and it still doesnt work.

upgrading to snow leopard 10.6.8, which came out today worked for me! good luck guys!

I upgraded to 10.6.8, and it's still not working. Ugh. If any of you figure out a work around please let us know.

I'd consider posting your log here and see if anyone can make sense of it. Displaying the log should be one of the options in the menu bar. i had an issue with a 'bless' terminal command that 10.6.8 seemed to clear up.

Thanks, okay well here is my install log. Maybe one of you know what is going on with this.

Jul 26 17:02:39 Sheldon-Reids-MacBook-Pro Install Mac OS X Lion[6979]: MDS Error: unable to create user DBs in /var/folders/SL/SL1e+MYNHemVO1PFMzMhB++++TI/-Caches-//mds

Jul 26 17:02:39 Sheldon-Reids-MacBook-Pro Install Mac OS X Lion[6979]: MDS Error: unable to create user DBs in /var/folders/SL/SL1e+MYNHemVO1PFMzMhB++++TI/-Caches-//mds

Jul 26 17:02:39 Sheldon-Reids-MacBook-Pro Install Mac OS X Lion[6979]: MDS Error: unable to create user DBs in /var/folders/SL/SL1e+MYNHemVO1PFMzMhB++++TI/-Caches-//mds

Jul 26 17:02:39 Sheldon-Reids-MacBook-Pro Install Mac OS X Lion[6979]: MDS Error: unable to create user DBs in /var/folders/SL/SL1e+MYNHemVO1PFMzMhB++++TI/-Caches-//mds

Jul 26 17:02:39 Sheldon-Reids-MacBook-Pro Install Mac OS X Lion[6979]: MDS Error: unable to create user DBs in /var/folders/SL/SL1e+MYNHemVO1PFMzMhB++++TI/-Caches-//mds

Jul 26 17:02:39 Sheldon-Reids-MacBook-Pro Install Mac OS X Lion[6979]: MDS Error: unable to create user DBs in /var/folders/SL/SL1e+MYNHemVO1PFMzMhB++++TI/-Caches-//mds

Jul 26 17:02:39 Sheldon-Reids-MacBook-Pro Install Mac OS X Lion[6979]: MDS Error: unable to create user DBs in /var/folders/SL/SL1e+MYNHemVO1PFMzMhB++++TI/-Caches-//mds

Jul 26 17:02:39 Sheldon-Reids-MacBook-Pro Install Mac OS X Lion[6979]: MDS Error: unable to create user DBs in /var/folders/SL/SL1e+MYNHemVO1PFMzMhB++++TI/-Caches-//mds

Jul 26 17:02:39 Sheldon-Reids-MacBook-Pro Install Mac OS X Lion[6979]: MDS Error: unable to create user DBs in /var/folders/SL/SL1e+MYNHemVO1PFMzMhB++++TI/-Caches-//mds

I had the same problem here on a Macbook Air (fresh installation of Mac OS X 10.6.8; some additional apps installed). Tried a lot of proposed solutions with no success. Even the creation of a bootable USB stick failed.

What worked for me:

- Extract the image InstallESD.img from Lion_Installer.dmg

- Mount InstallESD.img

- Start "Max OS X Lion installation.app"

- The installer will pretend to download additional content from the Internet but seems to just check data on the disk

- The installation will start

Kind of emberassing for the "it just works" company.

I was able to correct this problem by resetting the PRAM and NVRAM. Took my 3 days of troubleshooting to figure it out. Also corrected some slowdown issues I was having.

Thats right! It worked for me!!! Hold on option, command, P & R during rebooting and great solution!

Thanks that worked for me and also fixed the mouse startup problem..

After four hours of troubleshooting, this solution ended up being the one that worked! Thanks!

Please confirm key sequence? Is that P and & ?

Gah, "it just works" was not quite the case this time but I got it to work! I have an early 2008 Mac Pro with a RAID array and OS X 10.6.6. I downloaded Lion and got the infamously vague error message. I then tried the following in not necessarily this order:

1) First I tried zapping the PRAM by holding down command-option-P-R all at once during startup. Nothing happened. Then I remembered tip #1: For some reason, at least on my Mac, the keyboard only works during startup if plugged into the front of my mac, not if it is plugged into my monitor. This time I got two startup chimes like I'm supposed to, showing it was indeed zapped. Anyway, still didn't help.

2) Then I tried running disk utility from my installation disk and sure enough there were some problems with the disk which it fixed. Still didn't help Lion get installed.

3) I followed the nice instructions on how to burn your own Lion installation disk at: http://mashable.com/2011/07/20/lion-clean-install-guide/#20859Step-1-Download-Li on-From-the-Mac-App-Store

When I ran the install disk from the resulting installation disk I still got failure but this time it took the form of the installer freezing up during a "checking disk" message. Sigh...

4) I checked the hardware requirements but a Xeon Mac Pro is indeed Lion material.

5) On the theory that maybe the RAID array was causing problems, I used the Lion installation disk to undo the RAID (after a full backup!) and then redid it using its disk utility. Still no good. And Mail crashes now. Sigh.

6) Started looking up prices for new Macs and getting sticker shock.

7) Suddenly inspiration! The "checking disks" error caused me to remember reading something once about external firewire disks causing problems. I unplugged my WD external firewire disk drive (that I use for TimeVault backups) and tried again with my Lion installation disk. Success! 🙂

Anyway, hope my bedraggled saga will be helpful to someone.