OK, I went to throw Hyperspace.app in the trash can, and it informed me that wasn't possible, because the app was still running, even though it did not show up as a running app. So, what worked for me was to simply reboot, after removing the app from the dock. Likely it would have worked by simply rebooting after making certain it would not run at login. But the important point is that the issue did not require actually removing Hyperspace from my applications directory. This is a good thing, as it means that the Hyperspace application does not require an uninstall utility. It is sufficient to simply uncheck run at login, and remove it from the dock (so you don't accidentally run it again) and then reboot. If one knew the processes used by Hyperspace, they could probably simply kill those processes from the shell, except that if you have this problem, you can't type into the shell. Apple's installer should look for this offending application on upgrade, and disable it prior to the first boot of OS X Lion. After all, it was sold to folks out of their own supposedly secure app store, the very same place from which you purchased the OS X Lion upgrade. The good thing about the upgrade being distributed via the app store is that Apple can choose to fix this for future upgrades. Wether they will remains to be seen. None-the-less, the problem now has a known solution.
Thanks for the bandwidth.
Best wishes.