"This version of Mac OS X 10.7 cannot be installed..."

[SnapMan]

NO Extra folder on Installer partition in my build. You are starting up with Chimera to the installer, so presumably you don't need it....yet.

If you are installing over Snow Leopard, the Extra folder is still there.

If installing on a new partition, drag a copy of your existing Extra folder over.

 

[ummd]

Yes, I agree. Moving the /Extra folder to the installer partition did not help.

The last two suggestions are only applicable once I have actually managed to run the installer. I'm not at that step yet.

 

[ummd]

I followed MaLdOn's guide on insanelymac.com and the install went smoothly, so it appears there is something in this install method that wouldn't work for my system...