My PAINLESS fix:
1. Finder-> preferences->general tab->change to "always open folders in a new window"
2. Finder-> preferences->advanced->remove check for "show all filename extensions"
3. View-> as Icons
4. View->View options-> check "open in icon view" and "browse in icon view"
Making the above changes, I no longer had the finder crashing when opening folders etc. in Mac Lion OSX 10.7.4.
I noticed that in the desktop, when opening the icons and folders directly from the desktop, i was not crashing. I also noted the problem mentioned by other users with the leopard file extensions. However, instead of having to change file names, i mimicked the folder view i had in the desktop to the finder, thus avoiding the potential conflicts resulting in the check made viewing the problematic old extensions and a reiteration made when viewing in the same window. You may try to skip one or two of the above steps, but the above worked.
If you have any questions, please let me know or if i happened to skip a step. This was the least painful way to correct the problem and yet be able to view and access my files from the finder without any crashes.