Run internet recovery and then go into Disk Utility. Select the new SSD from the left, format it, and then create a "Macintosh HD" parititon. Then try installing Lion again, and you should be able to select the drive.
Just doing the migration assistant now from my time machine drive. Will that do all my emails and Internet and everything so once it's done this will have all my pics and it will be like it was before I swapped the drives??
Or do I go in to time machine and select my latest back up? But this won't let me click on restore on that back up once I enter time machine??
Edit. Think I got it. Restarted holding cmd + r then entered restore from time machine and away it is going. I imagine this takes a few hours?
So what's the diff between this and migration assistant?