Oh man, I just can’t take it any more. There are a lot of great things about Lion but All My Files is certainly not one of them. The Finder window just looks like a mess and it really throws a wrench in my OCD tendencies. Here’s how you disable it, and stop it from opening in every new Finder window for good. Gun not included.
There you go — All My Files is dead for good, and you’ll never have to see it again. If you decide to migrate your file system to the cloud entirely, I recommend selecting the Dropbox folder. It helps me remember to use Dropbox instead of my Documents folder.