There seems to be an issue in OS X Lion in which, under the right circumstances, Finder will crash and restart, showing the above dialogue box for a few moments, before crashing again. The cycle is endless, from what I saw today on my iMac.
I have no idea how widespread the issue is, as I don’t spent a ton of time around sick Macs anymore, but I thought I’d share what fixed it for me.
Once Finder was up long enough for Alfred to auto-launch, I ran this command in Terminal:
sudo rm -rf ~/.Trash
After entering my password, Terminal sat for a moment, executing the command.1
If you can’t get to Terminal from within the affected user account, you can use this command2 from another user on the machine:
sudo rm -rf /Users/USER-NAME-WITH-ISSUE/.Trash
In this case, Terminal will require the password for the logged in user.