I bought genuine apple os x lion off of ebay. it comes as a thumb drive. is that easy to use and install?

my neighbor gave me a macbook 4.1 a1181. it has os x 10.5.6 and wont undate any farther. i purchased os x 10.7 from ebay (genuine apple) and its on a thumb drive. is it easy to install and use? do i have to leave the drive in all the time for my OS to operate?

A MacBook4,1 is a Core 2 Duo processor machine and should be able to run Lion.  However, if you have the stock memory, 2 GB, it is not going to run well as Lion will use 1.5 GB of that memory.  It would be best to increase to to 4 GB or perhaps 6 GB, the limit of what the machine can use.
To install Lion, restart the machine holding the Option key.  When the startup screen shows you the internal drive and the flash drive with Lion, you will select the flash drive to startup.  You can then use the Utilities drop down menu to select Install Mac OS X, and select the internal drive to install on.  Then let the machine do its thing and install the new operating system.

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