You want to set an Open Firmware Password. This makes it so that a thief needs a password to boot to another disk (or do anything other than a normal boot). This means that they can't reset your password from the OS disc and get in anyway. This is an important security measure to take. The only problem is that you can't do things like safe boots and verbose mode. Here is an article about how to set up the OF password (and how to reset a user password).
And here is a general article about physical and virtual options to increase security (ways to help locate a stolen Mac, make thieves think it's broken, or even just lock it to your desk).
What went wrong was your hard drive is failing. The system cannot find a valid bootable system. You can test this by booting to an external drive (which looks like might have to wait for getting home or to the shop)
If the failure is happening fast - you just had bad luck and it would have failed within days no matter what. Get your stuff off and be glad you got things out before the "house burns to the ground".
If you had a slow failure, then the upgrade could have made things worse. This slow failure can often be made better by zeroing out the whole drive. Bad blocks get marked and for a while, it is reliable. You might buy some months or a year, but it's starting to fail.
Did the technician let you know if she or he felt you had a crisis or a slow issue with the HD?
As an analogy, Imagine a large "house" made of four decks of cards and lots of levels. If the far left hand side is shakey but you only are adding cards to the right, it might stand for a long time. As soon as you touch the left, down it comes.
A system upgrade touches everything - and re-writes the core software needed to boot. Your mac just wasn't up to having critical files written reliably and the upgrade brought those errors to stark light.
Put another way, Lion is running on millions of macs.
Sadly for you, something about your mac was different than most and the results quite painful to your productivity. The good news is many are going through the same pain - discovering how fragile HDD/SSD storage can be when a critical file fails to get written correctly.
I hope you get everything fixed, lose no data and can start enjoying Lion.
Best Answer
It appears to be a component of Apple's "Pro" apps (Logic, Aperture etc.). Here's what you want to know (hopefully), links to a knowledgebase regarding issues with Apple Pro apps following system migration...
And here's more from mothership Apple...