CLARIFICATION FOR LION INSTALL

I have a late 2009 27" Imac core 2 duo with 4 gigs of ram and will be installing Lion soon but need some clarification on a couple of things ......
First I am going to partition the HD so that I can still run Snow Leopard .........
This is where I need the clarification..........Once partitioned I think I  will need to install Snow Leopard on the second partition  and make sure that it is up to date (correct) once this has been done I can then download Lion and proceed with the install (I hope this is correct) Once this has been installed I should be able to reboot into either of these OS's ?? (I Hope)
Now , I want to create a bootable USB of Lion and I have the USB device and I have read a couple of articles on how to do this ,  has any one here done this and if so how did the USB boot work after doing it?? Will it run in virtual like booting from a live disc or is it just for back up purposes to re install Lion if it needs to be reinstalled for one reason or another??
Any and all help will be apreciated as I just want to make sure that I have this correct before I start so that I do not have to do this but once.

There should be an icon on the Desktop that looks like an external hard drive and is named "bash Update" or something like that. Drag it to the Trash. If you don't see it there, look in the sidebar of a Finder window under DEVICES and click the eject icon. Then look in the Downloads folder for a file with a similar name and drag it to the Trash.

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    Not a comforting message to see...
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    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
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