For those of us without external cd/dvd drives, installing OS X from a usb key is the next best option. Unfortunately making a bootable OS X installation on a USB key can only be done from within OS X. This is because there are currently no tools that can create, write to, and make bootable a journaled hfs+ partition. Linux seemed the best choice to try as there didn't seem to be windows tools for it. I started with GParted, which doesn't appear to be able to create an hfs+ partition at all. I was running Ubuntu and I found a debian package in the unofficial repositories called hfsprogs. This made it possible to create an hfs+ partition with journaling. But it was unclear whether any of the tools could turn journaling on and off (hfs+ non-journaled writing is supported by default in Ubuntu). It was also unclear whether or not the partition could be set to bootable. After hours of reading and experimentation I gave up because the following still needed to be done and it was unclear if this plan would even have any hope of working:
An image of the install disk needed to be extracted to the formatted partition. There's no way to write with journaling on, and that could make a difference, although I don't know why it would. Then it appeared some kind of abstraction layer for booting needed to be installed called EFI, which I was too lazy to read up about in detail. There is an open source solution for this called rEFIt, but when I went to use the tool I realized they were compiled for OS X. I didn't investigate whether they could be compiled for linux. But supposing that were installed, and it were ok that the files were installed without journaling, and the partition was set to bootable, and journaling could be turned on if necessary, a bootable OS X installation usb key might be able to be built by hand.
So I gave up. There are too many unknowns and a cheap external cd/dvd drive or conversion kit isn't that hard to find. Still, if anyone was planning on investigating this themselves, hopefully this might save them some time, either to stop early, or to delve deeper.