This alert box may appear if the FileSharingLib extension is not in the Extensions folder. This issue is resolved by updating to Mac OS 9.2.2. See Apple Software Downloads
http://www.apple.com/swupdates/
If you cannot update immediately, follow these steps:
1. As Classic or Mac OS 9 starts up, press and hold the Shift key to disable extensions.
2. Locate the FileSharingLib extension. If it is not in the "Extensions (Disabled)" folder of the System Folder, then try locating it with the Mac OS X version of Sherlock (if applicable). Use Mac OS X Finder in Mac OSX 10.2 and higher.
Alternative solution: If you cannot locate this extension, an alternative solution is to find the file "PrefRestoreInit", which should be in the Extensions folder inside the System Folder.
3. Drag FileSharingLib into the Extensions folder, which is in the Mac OS 9 System Folder.
Alternative solution: If you could not find FileSharingLib in the last step, then remove PrefRestoreInit from the Extensions folder.
4. Restart the computer or Classic, allowing extensions to load normally.
From:
http://docs.info.apple.com/article.html?artnum=106842