From Lion’s Install notes:

- The Recovery partition may not be created when installing Lion on a drive with an unsupported partition scheme.

This is a pretty interesting addition to the OS.  When you install Lion, it puts a little partition on the boot drive with some of the OS utilities.  If something goes wrong with your Lion build, you restart with the option key pressed and you boot into this new partition.

For me this worked a bit different.  I installed Lion on a Firewire hard drive.  The recovery partition was installed on my Snow Leopard internal disk(!).  So when I turned off my Mac and rebooted with the Firewire Lion disk removed, it defaulted to the recovery partition (scary).  Changing the startup disk fixed this pretty quickly but installer beware.

The repair partition is basically all of the repair/utilities you find on a OSX Installer DVD.

The obvious reason that Apple does this is because Apple will soon be going to more devices without optical media.  Having the repair partition built-in makes it easier to fix your machine if things go bad.  And who wants to keep a OSX Install/repair disc or USB stick with them wherever they go?

*At the moment there are some utilities built-in.  For instance, if you boot up with the shift key pressed, the Mac runs a disk check before your machine boots the OS.

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