Yeah, it didn't work the first time on my 1st generation MacBook Air either:

Snow Leopard installer wants disk in my MacBook Air to be repaired

At least the error message was pretty darn helpful. I did as I was instructed, and fired up the \"Remote Install Mac OS X\" utility, and followed the instructions. This utility allows a DVD drive-less computer (in this case, a MacBook Air) to boot over the network, from a Mac OS X Install DVD that is hosted in a different machine (in this case, my iMac). Furthermore, this can all be made to work over WiFi (which is helpful since I lack the USB to Ethernet adapter for my Air). So, I cranked my WiFi network up to 802.11n-only on the 5Ghz spectrum (to maximize performance), and had at it:

Remote Install utility on my iMac, doing its thing

The performance of booting a Mac from a DVD over WiFi was acceptable -- it took quite awhile to boot, but once it got going, it was reasonably fast. The interesting thing is that once booted off of the DVD, the Snow Leopard installer didn't force me to repair the SSD drive in the Air. The install just proceeded without issue.

So far, I'm happy with Snow Leopard on the Air. When I started, I had a little over 8GB of free disk space on the machine. After the install, I now have nearly 20GB free. That is pretty darn awesome. It also seems to wake up faster from sleep, and is faster to unlock the screen (I have my screen saver configured to require a password). I think it'd probably be really great for watching video, but unfortunately my machine has Intel integrated graphics... :(

-Andy.