"But here's where I have a question - assuming all goes well and Lion installs correctly, can I use my TM or CCC backup to restore my user folder, which contains my documents, folders, etc...?
I have the same question/concern about installed applications. Can I restore the applications folder to avoid having to reinstall and update all of my applications (assuming they are Lion compatible)?"
At the appropriate time in the installation process, the installer will ask you if you wish to install user accounts and data from another computer.
Yes, you want to do that.
You need to select the cloned backup as your source.
The installer will then "migrate" your user accounts, apps and other relevant data to the "fresh copy" of 10.7.
When finished, you will have a clean copy of Lion with your accounts and apps.
And of course, you will also have the cloned backup of Snow Leopard to keep handy for the time being. You might just want to keep that around, anyway -- even if you don't boot from it much. It's ALWAYS a good idea to have a second bootable drive around.