Macbook Pro (Lion) is requring a password to undelete files. Is there a way around this?
Applescript has a parameter administrator privileges which adding it to your script will execute the command as Administrator.

Extracted from Apple's Apple Script Language Guide:


  Execute the command as the administrator? Once a script is correctly authenticated, it will not ask for authentication again for five minutes. The elevated privileges and the grace period do not extend to any other scripts or to the rest of the system. For security reasons, you may not tell another application to do shell script with administrator privileges. Put the command outside of any tell block, or put it inside a tell me block.
  Default Value:
  false


So it should be something like do shell script "whatEver" with administrator privileges.