tar is installed as part of the system utilities, the only way it can be still an old version is if you upgraded your OS in place since before Intel days, or if you have an old version of tar sitting in your PATH that is being invoked before the system one is.
which tar in shell. If it says anything other than
/usr/bin/tar, it's not the system-native version of tar, and you should just remove it because it's not working anyway.
If it does say
/usr/bin/tar, try running
lipo -info /usr/bin/tar. The output should look something like
$ lipo -info /usr/bin/tar
Architectures in the fat file: /usr/bin/tar are: x86_64 i386 ppc7400
If the architecture list does not include x86_64 and i386, then you definitely have old versions of system utilities which are not compatible with Lion and
should be reinstalled. Probably the easiest thing to do at that point is to run a full backup of the system, and do a clean reinstall, because this situation should never occur and if it is happening, there's no telling what other system utilities are broken.