How can I upgrade my iMac to Lion 10.7?
OSX 10.7 Lion was not sold on DVD, the first retail OSX version to do so. You can obtain it through three methods:


Update your system to 10.6.8 (combo update is best via Apple, or Software Update if you like) and then, using the Mac App Store, purchase a copy of Lion
Purchase Lion via the Apple Store website which will email you a download redemption code for Lion: http://store.apple.com/us/product/D6106Z/A/os-x-lion
Use eBay or another website to purchase an official Lion USB key, released for those who cannot download the product. Check with the various sellers to see if they deliver to your location.