What might cause a a dock icon to have pixellated noise?
It's likely the Finder's application icon is corrupted.

To check, navigate to /System/Library/CoreServices/ and select Finder.app.  Get information on the file and see what the icon looks like.

I'm not sure where you can get a replacement icon (maybe another computer or the install disks with some package exploration).  I'd post mine here but for Apple's remarkably strict copyright lawyers.

--SOLUTION--

Navigate to ~/Library/Preferences and move the com.apple.dock.plist file to your desktop. This may result in your dock items needing to be reloaded. Logout and back in.