EDIT2:
As per http://apple.stackexchange.com/questions/103261/what-solutions-exist-to-rectify-a-corrupt-user-account-in-os-x, I've had temporary success running a terminal:
$ sudo su
$ cp /Users/<corrupteduser>/Libraries/Cache /somebackupdirectory
$ rm -r /Users/<corrupteduser>/Libraries/Cache/*
$ reboot
After it reboots the account could be logged into and used normally, but trying to close all the apps and reboot resulted in the account being corrupt again. So it's just a temporary solution.
EDIT:
Right now, all I can recommend is to create a new user account if you find an account which crashes Finder and appears to be corrupt. None of the other advice on this post appears to work. I have yet to try always closing all apps before doing an update. So far, every time I've done an update in Mountain Lion, my account gets corrupted and will eventually crash Finder. Even changing the corrupted account name doesn't fix it.
Original Post Below:
I'm somewhat still an OSX newb - and after several occurrences of updating the OS (10.8 Mountain Lion in my case) only to find it in an unusable state, here is what I recommend as an update process.
But first, the reasons why:
1) Even after finding that after an update things where in such a bad state that Finder would repeated crash, logging into a different user account worked fine.
2) All apps and working state in the other account was also still in tact after the update.
So I'm concluding that the user account actually gets corrupted (quite regularly) when running an OSX update.
If you haven't already experienced this - good news! You can still "do the right thing" so you'll be prepared if it ever does happen. Here's how to prepare:
1) Create another admin account. Call it OSupdate or similar. The purpose of this account is to only do updates from this account, and while doing the update, no other applications will be open (which might be what's causing the account corruption I'm seeing).
2) If possible, create a non-admin account which you normally work from. This isn't really necessary for this process, but it's more secure than running from an admin account every day. [Of course, some applications require an admin account, so if this is part of your normal workflow, you can just skip this step.]
CONCLUSION:
If you have the misfortune of a bad OSX update, the first thing to try log into a different user account if they are available, to verify that the account isn't corrupted, rather than the whole OSX install.
For more details:
http://apple.stackexchange.com/questions/103261/what-solutions-exist-to-rectify-a-corrupt-user-account-in-os-x
UPDATE:
Following these steps http://support.apple.com/kb/ht1428 to change my corrupted account name (in an attempt of starting over but still having access to old files), just changing the account name seems to have put that account back into a runnable state. I'll have to run it for a while before I'm confident that's really the case.
