The alien was a robot created by James Finson for his sci-fi/horror movie in End of Take. The film was to be shot at the Factory, so XANA possessed the robot and made it real. The alien trapped various people, including Sissi and Ulrich, before being stopped.
The alien was quite agile and athletic, and its claws could rip through metal. It could also spit a disgusting goo out its mouth which trapped its opposition in a sticky unescapable webbing. This extraterrestial menace was also quite strong.
It also licked Sissi's face, rather lovingly. Finson based it off the alien in the American movie Alien, as pointed out by Ulrich.
The alien also resembles the Predalien. This is probably a coincedence, because the predalien did not appear until 2004, while the episode aired in 2002.