Lion install fail on my macbook "a recovery service cannot be created" please help!

Trying to install lion on my Macbook but keep getting install fail error saying a recovery service could not be created"
I have a usb hard drive connected with time machine and a bootcamp 12 gig partition with windows XP
Please help its driving me mad!

managed to do the upgrade by deleting my bootcamp partition with windows xp on it. Think it was this making it unable to create the recovery partition.
However after doing the upgrade I was not impressed with Lion at all! Although it had new features it was running far slower and took ages to boot and shutdown and applications took ages to load and got loads of "spinning discs" waiting for stuff to load which never had before as this is a new Macbook with 4GB of ram.
Anyway after reading people with similar problems made a Lion install disc from the original download and did a clean install and restored my system.
What a difference! Vast improvment in speed and loading and performance! Thank goodness!
Just thought I'd share!

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Lion Install Failed "The Installer encountered an error that caused the installation to fail. Contact the software manufacturer for assistance."

Not a comforting message to see...
Here are the errors just before the above message is emitted and the install ends.
Jul 26 05:33:33 localhost OSInstaller[344]: PackageKit: Extracting file://localhost/Volumes/Mac%20OS%20X%20Install%20DVD/Packages/Essentials.pkg (destination=/Volumes/i7Mac/.OSInstallSandbox-tmp/Root, uid=0)
Jul 26 05:34:51 localhost OSInstaller[344]: PackageKit: Got copier error 2 extracting to path ./usr/lib/zsh/4.3.11/zsh/zselect.so: Read-only file system
Jul 26 05:34:51 localhost Unknown[329]: /SourceCache/AppleFSCompression/AppleFSCompression-37/Common/DataPool.c:135: Error: finished pool without filling it
Jul 26 05:34:51 localhost Unknown[329]: /SourceCache/AppleFSCompression/AppleFSCompression-37/Common/commonUtils.c:360: Error: fh_pread -1
Jul 26 05:34:51 localhost Unknown[329]: /SourceCache/AppleFSCompression/AppleFSCompression-37/Common/StreamCompressor.c :294: Error: pread failed for /Volumes/i7Mac/.OSInstallSandbox-tmp/Root//usr/lib/zsh/4.3.11/zsh/zselect.so: Undefined error: 0
Jul 26 05:34:51 localhost Unknown[329]: /SourceCache/AppleFSCompression/AppleFSCompression-37/Common/StreamCompressor.c :928: Error: returning errno 22 from FinishStreamCompressorQueue
Jul 26 05:35:33 localhost OSInstaller[344]: PackageKit: Install Failed: Error Domain=PKInstallErrorDomain Code=110 "An error occurred while extracting files from the package “Essentials.pkg”." UserInfo=0x7f83610395f0 {NSLocalizedDescription=An error occurred while extracting files from the package “Essentials.pkg”., NSFilePath=/Volumes/i7Mac/.OSInstallSandbox-tmp/Root, NSURL=Essentials.pkg -- file://localhost/Volumes/Mac%20OS%20X%20Install%20DVD/Packages/OSInstall.mpkg, PKInstallPackageIdentifier=com.apple.pkg.Essentials, NSUnderlyingError=0x7f8360d42420 "The operation couldn’t be completed. FinishStreamCompressorQueue error"} {
         NSFilePath = "/Volumes/i7Mac/.OSInstallSandbox-tmp/Root";
         NSLocalizedDescription = "An error occurred while extracting files from the package \U201cEssentials.pkg\U201d.";
         NSURL = "Essentials.pkg -- file://localhost/Volumes/Mac%20OS%20X%20Install%20DVD/Packages/OSInstall.mpkg";
         NSUnderlyingError = "Error Domain=BOMCopierFatalError Code=1 \"The operation couldn\U2019t be completed. FinishStreamCompressorQueue error\" UserInfo=0x7f8360d47220 {NSLocalizedFailureReason=FinishStreamCompressorQueue error, offset=2847022, type=BOMCopierFatalError, sourcePath=/Volumes/Mac OS X Install DVD/Packages/Essentials.pkg, destinationPath=/Volumes/i7Mac/.OSInstallSandbox-tmp/Root}";
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Jul 26 05:35:33 localhost OSInstaller[344]: install:didFailWithError:Error Domain=PKInstallErrorDomain Code=110 "An error occurred while extracting files from the package “Essentials.pkg”." UserInfo=0x7f83610395f0 {NSLocalizedDescription=An error occurred while extracting files from the package “Essentials.pkg”., NSFilePath=/Volumes/i7Mac/.OSInstallSandbox-tmp/Root, NSURL=Essentials.pkg -- file://localhost/Volumes/Mac%20OS%20X%20Install%20DVD/Packages/OSInstall.mpkg, PKInstallPackageIdentifier=com.apple.pkg.Essentials, NSUnderlyingError=0x7f8360d42420 "The operation couldn’t be completed. FinishStreamCompressorQueue error"}
Jul 26 05:35:34 localhost OSInstaller[344]: Install failed: The Installer encountered an error that caused the installation to fail. Contact the software manufacturer for assistance.
If I boot to the "Recovery HD" I get a message "Installation Failed, Try re-intalling" Which would be a fine idea, but I can't because if I re-start installation from the hard drive I get the above errors.
I've burned the "InstallESD.img" to a DVD, but it also doesn't seem to work. Comes up as though I'm in the Reco

Jen,
Here's what I did to get Lion installed:
Burn the installer to a DVD and install from there. It worked for me. Here's what you need to do:
First you need another computer running at least 10.6.8.
1. On the other computer go to 'App Store' (make sure you're logged in to the App Store with the AppleID you used on the troubled computer)
2. Click on 'Purchased' in the 'App Store' window's toolbar
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3. a, if the other computer is already running Lion, you'll need to re-download the installer.
3. b. Hold down 'Option' when selecting 'Purchased' then you click "Install"
4. When the Lion Installer starts up, just quit it. You want to work with the Installer application.
5. Find the "Install Lion OS X" application in the 'Applications' folder.
6. Hold down 'Control' and click on the application and select 'Show Package Contents'
7. Find 'InstallESD.dmg' which is in the "Shared Support" folder and copy it to your desktop.
8. Burn 'InstallESD.dmg' to a DVD ('Disk Utility' is simplest to do this).
9. Put the new install DVD into the computer that has Lion partially installed and reboot holding down the "C" key.
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In my case, when it rebooted to the harddisk the Lion installer started AGAIN. If this happens, let it run. Then you should be done.
Hope this helps.

Lion install fail on my macbook "a recovery service cannot be created" please help!

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