"Instead of" and "in lieu of" can mean the same thing, but "instead of" is much more commonly used. "In lieu of" is more formal and would sound out of place for many uses. For example, we would not say "Let's go to a movie in lieu of going to dinner." We would use "instead of" in that sentence. An example using in lieu of: (in a death notice) "In lieu of flowers, the family requests donations to the American Cancer Society."