Is it easy to boot a from external drive with Snow Leopard on it

I've had never any problems with upgrades and never lost any files.

You should make a backup — or better, make a bootable clone of your current hard drive:

• Buy an external hard drive
• Install Snow Leopard on the external drive.
• Reboot into the clean external Snow Leopard drive, migrate over users and apps and run all updates. Run from that external to be sure it's a workable copy of your internal drive.
• Disconnect the external drive and put it on the shelf.
• Reboot back into your regular internal hard drive and proceed with the upgrade to Lion.
• Download Lion and run the installer!

Until you're certain that Lion works perfectly, keep the clone around - several months is usually enough time. If you ever need any files from it, just attach the drive and drag-and-drop them. If something goes really horribly wrong, you can boot into the clone, and then clone it back to the internal drive (you'll lose any changes made since you installed Lion). This second drive is really valuable for when you discover three months down the road that one seldom used piece of software won't work on Lion. You can reboot into Snow Leopard where everything still works and get that one task done. It's a great lifesaver and means you can start using Lion rather than checking that every little thing works perfectly right after the upgrade.

EDIT: Thanks Trombone for editing my broken-english post, but please, never add your own ideas into my post. My solution uses pure apple tools, so why bother with SuperDuper, when you can do it with nice clean install and Migration Assistant.

I never recommend any third-party products when things can be done with default Apple SW. Of course, you can prefer SuperDuper, it is your way - but not mine. Please add another answer explaining how to use SuperDuper or other awesome tools so that people can have a choice. Let's keep this solution needing no additional tools.

You will need a USB drive (8GB) and access to another Mac. You can use any external drive instead of a USB drive, but be aware that you'll have to format the drive and you'll loose any content on it.

• Insert the Snow Leopard DVD and the USB drive into a Mac with a working optical drive
• Start 'Disk Utility'. You should see your USB drive and the SL disk in the left pane.
• Select the USB drive in the left pane.
• In the right pane: Select Volume Scheme: 1 Partition
• Format: Mac OS Extended (Journaled)
• Enter a name for the USB drive in the 'Name' field. You can use "Mac OS X Install DVD".

• On the bottom: click 'Options' and choose 'GUID Partition Table' and click 'OK', then 'Apply'. The USB drive will be partitioned and reformated.

• When that is done select the 'Restore' Tab

• There are two fields: 'Source' and 'Destination'
• Drag the SL Installer DVD from the left pane to 'Source'
• Drag the newly formated USB drive from the left pane to 'Destination'

• Click 'Restore'

• Once the restore is done eject the USB drive, put it in your Mac and reboot. Hold 'Option' while your Mac is booting, this will get you to the boot selection list. Choose your "Mac OS X Install DVD" and you're ready to go.