Tried doing a clean install of lion and now have a folder with question mark appearing when mac boots

I purchased a 2011 mac mini I was having some issues and as I had already bought lion for one of my other macs and put it on a usb key I formatted the mac mini's hdd and put the usb key in to one of the Mini's usb ports and booted the mini up and held down c when the white scren appeard it stayed white for a few secnds and then a folder with a question mark started flashing no option to select my connected usb key I tried several more re boots and each time got the exact same result.
What on earth has apple done so now I can't even access attached drives during booting.
Any ideas how I can sort this out?

Maybe it is not "what has Apple done"   You may have jumped the gun a little formatting your system so quickly without ensuring you can actually boot via an alternate method.
The mini has a recovery partition, and instructions how to reinstall the OS from that.
USB drive. Sounds to me like you don't have a proper OSX Bootable USB drive?
Also, the new way Apple allows reinstallation is over the internet too.

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