Clicking on the trash icon also opens a finder window

Er, um, yeah, I knew that (brain fart) ;-)

I couldn't find ~/.Trash in the Finder equivalent of OS 9

There is a hidden attribute that is probably set for that folder. There are a variety of different ways to change that under OS 9, but as I haven't really used OS 9 in about 3 years I don't recall the easiest one or the exact steps. You can use a variety of tools including ResEdit, FileBuddy, and the find command to locate and throw away a hidden folder. Perhaps somebody else (or Google) can list the steps.

But, all that aside I agree with whoever said earlier that this sounds like a file system error that fsck should catch. I wonder if it is fixed in 10.2?

-Mike