Can I safely rename all directories in my home directory to lower case?
As far as OS X is concerned, this is acceptable IF you have selected a non-case sensitive filesystem. 



The non-case sensitive filesystem is the default, so unless you selected case sensitivity during installation of your operating system (or in Lion's most likely case, your previous operating system), you should be fine.

When selecting file system case sensitivity (or not), it should also be known that while the operating system itself will be okay with this, certain applications may not. There are problems using nearly all of Adobe's applications on a case sensitive file system. At the time of this answer, the Adobe Knowledge Base article regarding this issue was last updated roughly 9 months ago (2010-11-03) and this is still the case. Adobe's only answer to the problem was, and remains, to not use case sensitivity.

It is possible that other software also suffers from this issue, or may suffer from similar issues if a case sensitive filesystem is used.