The context for this error? Trying to delete a shortcut from the desktop. Windows thinks it doesn't exist. My eyes tell me it does. Now which one of us should the operating system assume to be correct? There is a selectable object on the desktop. You're trying to tell me it's not there. And clicking on "Try again" gets me right back to the same dialog box.
This is exactly the kind of issue that Microsoft needs to address in Windows 7. It's the kind of thing which shows a lack of thought about the user experience, and too much complexity underneath the surface.
Vista has many good points. In visual looks, I think its user interface is, in many ways, ahead of Mac OS X's (and well ahead of Linux – although obviously that's a subjective view. In terms of how to approaches security, it's ahead of OS X, something that will surprise most Mac users.
But once you start doing things which are slightly away from the most-common tasks, Vista tends to turn into a nightmare. Wander away from the common tasks in OS X, and the operating system tends to retain a lot of consistency in how you use it. In Vista, it tends to either default back to behaviours which are similar (but rarely identical) to Windows XP. Or it just breaks down in a flurry of half-thought out interface ideas.
I've never seen an operating system which appears as half-finished as Vista, and that includes the various alphas, betas and "version one's" that I've used over the years. And given that this is Microsoft's flagship OS, that's a pretty damning thing to have to say.