This article is from the Macintosh system software FAQ, by Elliotte Harold firstname.lastname@example.org with numerous contributions by others.
Possibly the folder contains items that are locked or in use and
can't be thrown away. Turn off file-sharing (if it's on) and quit
all applications. Then try to throw the folder away. If that
doesn't work and you're using System 6, hold down the option-key and
drag the folder into the trash; or, if you're using System 7, hold
down the option key while selecting "Empty Trash" from the special
menu. Holding the option key down lets you throw away locked items.
If that doesn't work restart the computer, hold down the option key,
and try again. If you still can't throw away the folder, try
throwing away the items in the folder (if any) one by one until you
find the ones giving you trouble. Remove them from the folder, and
then throw the folder away. If you still can't throw the folder
away, you've discovered a "Folder from Hell." Create an empty folder
on *ANOTHER* disk with the same name as the Hell Folder. Then copy the
new folder onto the same disk in the same folder as the Hell Folder.
Click "Yes" when asked if you want to replace the Hell Folder. Now
you should be able to throw the just copied folder away. If that
doesn't work, get a copy of John Jeppson's HellFolderFix utility from