Lion will go on sale “in July” for $29.99, and will be available as a 4GB download through the Mac App Store. This means (unless Apple announces otherwise) the only way to upgrade to Lion will be to first have Snow Leopard installed, then log into the Mac App Store with an Apple ID to make the purchase.

Lion Server will also go on sale in July for $49.99, and will be available as a download through the Mac App Store after upgrading to Lion. Apple has not made it clear if you must first install Lion and then install Lion Server, or if the Lion Server upgrade can be made on an existing Snow Leopard server via the Mac App Store.

Of course requiring users to purchase and install Lion (and Lion Server) via the Mac App Store is going to cause all sorts of logistic issues for schools and corporations, and will complicate OS installs from scratch. The massive download size will also prove challenging for those without fast broadband connections. Surely Apple will include a stand alone Lion install disc with new Macs, but the future of a retail stand alone Lion installer is unknown at this point.