If you are using the internal drive as the boot volume, you can not erase it. It is impossible to erase the boot volume - the running OS will not suicide.
If that is the case, the solution is to boot the machine to a different volume - typically an installation disk, but can also be a different hard drive such as an external one. Once you are booted to a volume other than the one you want to erase, you can use Disk Utility to erase that volume.
You cannot erase the root drive if you are booted off it, you'll need to boot off your install DVD's or else the Lion recovery partition.
Once you are running off something other then the root drive you will be allowed to erase and partition it.