This piece of business has cost me an entire morning's work...
Install > restart > blue screen, with cursor gently disappearing and reappearing every 30 secs. This continued for about 30mins, until I rebooted to a back-up disk. Tests with Disk Utility, TechTool and Disk Warrior found nothing. Tried 10.7 HD start again - same result. In the end I had to replace it with the backup.
Heads up, Apple! - we expect better than this after 25 years of loyalty, faithfully following you through the PC wilderness.