His app automates the process of making a bootable install disk for both Lion and Mountain Lion—just run the app and let it do its thing.

This is used to make an "exact replica of a disk or partition, probably for the making of bootable CDs." He used this clone option to make an image of the OS X 10.1 .dmg file to an empty partition ...

4. Create a boot DVD The process for creating a bootable DVD is very similar, and again uses Disk Utility and demands the InstallESD.dmg file we extracted from the Lion installer.

You should now see the normally hidden BaseSystem.dmg file in the mounted volume. Open Disk Utility and restore the source BaseSystem.dmg to the destination of your USB drive.

You used to be able to create a bootable USB stick by restoring a DMG file located inside the installer app to a USB stick using Disk Utility. But the last version of OS X that worked on was 10.8.