that the computer cannot find a valid System folder.

If it happens again when you restart you machine, there is a distinct possibility that the hard drive has failed.

However, before you go off weeping and wailing, put the OS X installation disk or the disk that came with your Mac, into the optical drive and try to boot from it.
If the machine boots, use the Disk Utility which is on the CD/DVD, to take a look at the hard drive. If the drive is dead, it will not appear in the Disk Utility sidebar.

Obviously the fix for a dead HD is to replace it. It is a user replaceable part. If it is under warranty, call Apple.
If it's not, take a look at macsales.com, or similar places, for a replacement SATA hard drive. Stick with the same HD speed but you can go for a larger capacity drive.

Let us know how you get on

P