One of the new features of Mac OS X Lion is Lion Recovery which includes all the tools you need to reinstall, restore or repair your Lion installation on your Mac.

Apple's support page for Lion Recovery

One item of note is how to reinstall your iLife applications after a restore of Lion. You can just download them from the Mac App Store if Lion came pre-installed on your Mac. Here's how:

1. After installation, start from Lion.
2. Double-click the App Store icon in the dock.
3. Enter your Apple ID and password.
4. Click Purchases.
5. If you haven't previously accepted your bundled iLife applications within the Mac App Store, you should see your iLife applications appear in the Accept portion of the screen. Click Accept.
6. You may be asked for your Apple ID and password once again. Your iLife applications now move to the Purchased section. These applications are part of the software that came with your Lion based computer. Your account will not be charged for them. Click Install to compete installation of your applications.

Slick. No more worrying about where your iLife disc is in some drawer you haven't cleaned out in years.