Why is my MB Pro trying to do setup - security issue?

Question

My MB Pro with OSX Lion was working fine after the most recent software update.   I have it set to require a login at startup but I don't get a login screen.  Instead, I get a setup prompt.  It's as if it's been reset to factory default.
I was out of town this weekend and left it home. It's possible that someone tried to log in, but could they have reset it to default?
What can I do to avoid a reset. I have a backup that is two weeks old but I want to avoid using it if I can. Also, I'd like to find out if someone tried to log in while I was away.
Any help greatly appreciated.

Answer 1

Thanks very much for your response. I really appreciate it.
I'm not sure how to check if individual files are still intact as I can't get to the finder. However, I booted from the HD recovery partition and ran Verify Disk. The disk verified okay.  I have a 250gb disk and 6gb is shown as available, which is accurate.
Permission verify basically says all permissions are wrong - should be 0 and are set to 501.  I assume this means that the system thinks it is new and that 0 is the default user for a new system.  Perhaps the user accounts are either gone or the system is not seeing them.  In either case I'm guessing it would be unwise to run Repair Disk Permissions.
Does it make sense to try this solution which I found on another site to see if I can get the users back? Thanks again.
Step 1: Reset ROOT Password for Mac OS X Lion:
Restart your Mac,
Hold “Command+R” buttons just the moment your Mac starts up,
Hold still…
A window should appear, it says “Utilities…”
From the tools menu, at the top, open “Terminal”
Type “resetpassword” and hit enter
A new window opens, select the System Administrator account (root) option
Set a new password, easy to remember for you,
Confirm and close all the windows,
A question will appear as would you like to restart?
Restart!
Step 2: Login as ROOT on Mac OS X Lion: 
Let the Mac startup,
At login screen, type the user  name as “root” and put in the password you’ve chosen in step 1.8 above.
Wait a while…
You should be logged in with the “root” account to your Mac OS X Lion.
Step 3: Re-create your user (Reincarnation!)
Right click on the “Finder” icon in the dock, select “Go to folder…”
Type “/” and click on “GO” to go to your Mac’s hard drive,
Navigate to the “Users” directory, you should see your own user folder, remember the folder’s name!
Click the Apple logo on the left top side of the screen, select “System Preferences…”
Go to “Users and Groups”
Your user should not exist in the left side list, so click the small “+” button below the users list to add a new one.
Set your Full name as it was previously (not very important though)
Set the “Account name”  EXACTLY AS THE FOLDER NAME YOU SAW IN STEP3.3 (VERY IMPORTANT)
Set an easy to remember password for your account,
And hit “Create User”
Confirm on “using the Existing folder for Home…”
Wait….until you see your user appear on the users list…
Step 4: Back on the Road:
Restart your Mac
Login to your own account easily and get all your data back!