Installing a Lion Vm within Mountain Lion

Solution 1:

OK, having had a good play the following options are possible with Parallels:

1. From the Recovery Partition on your machine, however this only works from the current one, not any other attached ones, so if you are booted into ML, you can only use the ML recovery partition - so no go for Lion
2. From original Media, in this case an official USB stick as it was not available on DVD, I didn't have one, so no good for me (note that hand made ones will not work, neither will if you created a bootable partition
3. From a Disk Image file. As with option 2. above, creating a bootable DVD/USB Stick/partition on an drive etc will not work if you have extracted the image file to create one. You need the actual DMG file. If you have the original App Store download, the easiest way to get this is is to rick click and Show Package Contents, then find the InstallESD.dmg file and make a copy of it.

Using the file from method 3. will allow you to use the new VM Wizard to create the Lion VM

Solution 2:

For Parallels see their knowledge base article for "How to create Lion Virtual Machine using Parallels Desktop 7 for Mac". The second part shows hoe to fo it from a USB stick, although the software seems lable some options as Windows.

1. Insert Apple USB stick with Lion into your Mac
2. Start Parallels Desktop 7 for Mac
3. Open Parallels Wizard using File → New...
4. Select "Install Windows from DVD or image file". Press Continue.
5. Select Install from: "APPLE USB DISK". Press Continue.
6. Select Mac OS X operating system type. Press OK.
7. Continue
8. Install Mac OS X according to instructions in wizard.
9. Install Parallels tools into VM using Virtual Machine → Install Parallels Tools...