how do I restore macbook, late 2008 with Lion 10.7.5 using Lion purchased via the Apple store?

At present, what OS X version is installed on the MacBook? Why do you want to reformat the disk?

I'm a bit confused by your question. If it is already running Lion, you must have already purchased it, so I don't understand the need to purchase it again.

You don’t want to update to the newest OS if you are going to sell your MacBook. 10.6 Snow Leopard was the last OS to come on a DVD so it could be installed on any Mac. 10.7 Lion, 10.8 Mountain Lion and 10.9 Mavericks are only available as downloads linked to your Apple I.D. and password. So if your son wants to reinstall 10.7 or 10.8 they need your Apple ID and password. It’s better to install 10.6 and let them update to the latest OS using their own Apple ID. Be sure to include the 10.6 disk when you give it to him.

The 10.6 Snow Leopard DVD is in the Apple online store. You can get it for $19.99. http://store.apple.com/us/product/MC573/mac-os-x-106-snow-leopard After you’ve installed that then download the 10.6.8 combo updater to finish it off. http://support.apple.com/kb/DL1399 You will need to be running 10.6.8 to access the App Store to order Lion, Mountain Lion or Mavericks.

Thanks. If you or your stepson were to erase the hard disk, Lion could be reinstalled from the Recovery partition. However, reinstalling Lion subsequent to its erasure will require the Apple ID used to purchase it.

To accomplish what you intend, you should purchase Lion using your stepson's Apple ID - not yours. If he does not already have an Apple ID, create one on his behalf. It needs to be a valid email address and he needs to be at least 13 years old. In the event he ever needs to reinstall or update OS X, that Apple ID will be required. Otherwise, your stepson will need to ask you for your Apple ID and password every time. That gets tedious.

Obtaining a replacement System Install DVD from Apple is a good idea. The cost is reasonable. The biggest challenge will be finding the person who understands what it is you require. When you eventually speak to someone who asks for the MacBook's serial number, the rest will be easy.

I reinstalled Lion but some of my apps don't work and i cannot execute terminal commands. when i type a terminal command it gives me the following error

defaults write com.apple.dock no-glass -bool true

2014-05-11 14:49:07.401 defaults[4696:707] Could not write domain /Users/shey2k/Library/Preferences/com.apple.dock.plist; exiting

i need to change my dock back to it's original state and these commands don't work including text edit, evernote onyx etc..

when i do a permissions repair and click verify permissions it still keeps showing errors

What could be the cause for this?

Mac mini, Mac OS X (10.7.5)