By creating a bootable install drive, you can perform clean OS X 10.8 installs, install it on separate partitions, and install OS X Mountain Lion on Macs that don’t have internet connections. We’ll walk through the process here, but don’t forget to check OS X 10.8 system requirements for the destination Mac before beginning.

If you already have the Mac OS X Mountain Lion install DMG extracted, skip this first set of steps and jump directly to making the bootable drive below.

Download OS X Mountain Lion and Extract the DMG File

1. Download OS X 10.8 Mountain Lion from the App Store
2. Go to the /Applications/ directory and right-click on “Install Mac OS X Mountain Lion.app” selecting “Show Package Contents”
3. Open the “Contents” directory and then open “SharedSupport”, looking for a file named “InstallESD.dmg”
4. Double-click on InstallESD.dmg to mount it on the desktop

Make the OS X Mountain Lion Install Drive

1. Launch Disk utility and connect a USB drive to the Mac
2. Select the USB drive from the left menu and click on “Erase” tab, choose “Mac OS X Extended (Journaled)” as the format, then click on the “Erase” button in the corner

3. Now select the formatted USB drive from the left side and click on the “Restore” tab
4. Drag the previously mounted “Mac OS X Install ESD” image into the “Source” section
5. Drag the formatted partition to the “Destination” section, then click on “Restore”

6. Confirm that the USB drive will lose it’s data and enter the Admin password when asked

Disk Utility will now create a bootable OS X Mountain Lion installer drive out of USB drive using the disk image, this can take a little while depending on how fast the drive and Mac are but 20-30 minutes isn’t unusual.

When finished, reboot the Mac and hold down the Option key to bring up the boot menu:

Select the orange “Mac OS X” option and you will boot into the OS X Mountain Lion installer, from here installation is the same as normal. Click on Continue, select the destination drive, and install.