IMac won't keep system settings. Mac OS X version 10.6.5. New to this and need help. Thanks

Question

Just got my first iMac and am new to the Mac operating system. I figured out how to set it so I could connect to the internet and also set my wallpaper and screensaver to my liking.  After I shut it down and turned it on later, all of my setting were gone. It reset itself back to the original settings it had when I got it.  I bought it at an auction and it was previously owned by a local community college. I did not get any disks with it. I have searched the internet on how to fix it and am more confused than ever. I don't know if I have Leopard, Snow Leopard, Lion, etc.
The computer seems to work just fine. It boots up quickly is loaded with programs I have yet to learn. I do know that it sat unused for a year or more. Could it be that the internal battery could be dead? I have looked but cannot find any kind of diagnostic test or information regarding the internal battery on the internet. Not exactly sure what kind of info someone would need to help me fix this issue.  The hardware overview I found in system profiler looks like this:
Model Name:                       iMac
Model Identifier:                   iMac4,1
Processor Name:                Intel Core Duo
Processor Speed:               2 GHz
Number of Processors:       1
Total Number of Cores:       2
L2 Cache:                             2 MB
Memory:                                2 GB
Bus Speed:                          667 MHz
Boot Rom Version:              IM41.0055.B08
SMC Version (system)       1.1f5
Serial Number (system)     QP********U2S
Hardware UUID                   00000000-0000-1000-8000-0016CB8BC90C
Any help or suggestions would be greatly appreciated and thanks in advance!
<Edited by Host>

Answer 1

The retail version of Snow Leopard is 10.6.3, so the only way this model would be running 10.6.5 is if someone installed a version of Snow Leopard that came with a new iMac model with 10.6.5 pre-installed. In effect this computer has the wrong version of Snow Leopard installed which could be the reason for your problem.
I suggest you do this:
Upgrading to Snow Leopard
You can purchase Snow Leopard through the Apple Store: Mac OS X 10.6 Snow Leopard - Apple Store (U.S.). The price is $19.99 plus tax. You will be sent physical media by mail after placing your order.
After you install Snow Leopard you will have to download and install the Mac OS X 10.6.8 Update Combo v1.1 to update Snow Leopard to 10.6.8 and give you access to the App Store. Access to the App Store enables you to download Mountain Lion if your computer meets the requirements.
     Snow Leopard General Requirements
       1. Mac computer with an Intel processor
       2. 1GB of memory
       3. 5GB of available disk space
       4. DVD drive for installation
       5. Some features require a compatible Internet service provider;
           fees may apply.
       6. Some features require Apple’s iCloud services; fees and
           terms apply.
After you receive your Snow Leopard DVD do the following:
Clean Install of Snow Leopard
Be sure to make a backup first because the following procedure will erase
the drive and everything on it.
     1. Boot the computer using the Snow Leopard Installer Disc or the Disc 1 that came
         with your computer.  Insert the disc into the optical drive and restart the computer.
         After the chime press and hold down the  "C" key.  Release the key when you see
         a small spinning gear appear below the dark gray Apple logo.
Booting From An OS X Installer Disc
1. Insert OS X Installer Disc into the optical drive.
  2. Restart the computer.
  3. Immediately after the chime press and hold down the "C" key.
  4. Release the key when the spinning gear below the dark gray Apple
      logo appears.
  5. Wait for installer to finish loading.
     2. After the installer loads select your language and click on the Continue
         button. When the menu bar appears select Disk Utility from the Utilities menu.
         After DU loads select the hard drive entry from the left side list (mfgr.'s ID and drive
         size.)  Click on the Partition tab in the DU main window.  Set the number of
         partitions to one (1) from the Partitions drop down menu, click on Options button
         and select GUID, click on OK, then set the format type to MacOS Extended
         (Journaled, if supported), then click on the Apply button.
     3. When the formatting has completed quit DU and return to the installer.  Proceed
         with the OS X installation and follow the directions included with the installer.
     4. When the installation has completed your computer will Restart into the Setup
         Assistant. Be sure you configure your initial admin account with the exact same
         username and password that you used on your old drive. After you finish Setup
         Assistant will complete the installation after which you will be running a fresh
         install of OS X.  You can now begin the update process by opening Software
         Update and installing all recommended updates to bring your installation current.
Download and install Mac OS X 10.6.8 Update Combo v1.1.
Basic Backup
For some people Time Machine will be more than adequate. Time Machine is part of OS X. There are two components:
1. A Time Machine preferences panel as part of System Preferences;
2. A Time Machine application located in the Applications folder. It is
     used to manage backups and to restore backups. Time Machine
     requires a backup drive that is at least twice the capacity of the
     drive being backed up.
Alternatively, get an external drive at least equal in size to the internal hard drive and make (and maintain) a bootable clone/backup. You can make a bootable clone using the Restore option of Disk Utility. You can also make and maintain clones with good backup software. My personal recommendations are (order is not significant):
  1. Carbon Copy Cloner
  2. Get Backup
  3. Deja Vu
  4. SuperDuper!
  5. Synk Pro
  6. Tri-Backup
Visit The XLab FAQs and read the FAQ on backup and restore.  Also read How to Back Up and Restore Your Files. For help with using Time Machine visit Pondini's Time Machine FAQ for help with all things Time Machine.
Although you can buy a complete external drive system, you can also put one together if you are so inclined.  It's relatively easy and only requires a Phillips head screwdriver (typically.)  You can purchase hard drives separately.  This gives you an opportunity to shop for the best prices on a hard drive of your choice.  Reliable brands include Seagate, Hitachi, Western Digital, Toshiba, and Fujitsu.  You can find reviews and benchmarks on many drives at Storage Review.
Enclosures for FireWire and USB are readily available.  You can find only FireWire enclosures, only USB enclosures, and enclosures that feature multiple ports.  I would stress getting enclosures that use the Oxford chipsets especially for Firewire drives (911, 921, 922, for example.)  You can find enclosures at places such as;
  1. Cool Drives
  2. OWC
  3. WiebeTech
  4. Firewire Direct
  5. California Drives
  6. NewEgg
All you need do is remove a case cover, mount the hard drive in the enclosure and connect the cables, then re-attach the case cover.  Usually the only tool required is a small or medium Phillips screwdriver.