That means the EFI (similar to a PC's BIOS) can't find a system folder which contains all the information needed to boot the OS.
This particular symptom can have a number of causes ranging from a corrupted OS to a bad HDD. If it's an 07 model, I'd say the latter is the more likely. I'd be willing to bet a shiny nickel that it's been running rather sluggish the past few days. Or that you were trying to upgrade to Lion and neglected to mention that fact.
First thing to try, since it's basically free, is to try reinstalling the OS from the restore media that came with your system. If you're lucky, it is just a case of a corrupted OS, and you can be up and going again in about an hour. If Disk Utility on the OS install DVD doesn't even see your HDD, then it's likely dead and you need to get it replaced. As repairs go, this isn't an overly expensive one if you want to have it done for you. Probably in the $250US range give or take. Or you can fit your own SATA 2.5" HDD in there. I'd try and stick as close as you can to the size of the drive that came with your system. In theory there's no particular upper limit, but sometimes you find you're that one person in a hundred that can't get things to work properly.
I tried to boot up my '07 black Macbook yesterday and it wouldn't even get to the stage of me entering my password. The screen was blank(greyish white) with a blinking file that had a question mark in the middle of it. I tried to shut it down and restart but had the same results. Any idea what is causing this and what it means? How do I get past this?

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