Your options depend on what else you have available. If all you have are a blank SSD, a USB drive holding a Time Machine backup, and a Lion DVD, then your only option is install the SSD, boot off the Lion DVD, and restore the now-internal SSD from the Time Machine backup. You do not need to install Lion on the SSD first as long as the Time Machine backup is from the same computer you are restoring to. (If it is a different machine there can be issues with drivers and UUIDs.)
If you have a working internal drive already and you want to clone it, you might want to invest in an external drive case (preferably one that has both Firewire and USB interfaces) and put the SSD in that, then use Carbon Copy Cloner (free to use, payment requested if you feel it is worth it) to clone the drive. I think the external case is a good investment because after you clone the drive, you put the SSD in your laptop and the old internal drive in the external case and you have 2 usable drives.