macosSecuritysoftware-update
I just had to install the latest Security Update from the Mac App Store and it started auto updating.
Then when I completed the update (and restarted) my Mac asked me to enter in my Apple ID password and asked me if I would like the 'Cloud keychain thing', after that it said it was setting up my mac (just like the first installation!) it did however keep all my data.
Is this normal for the latest update or do I have some sort of virus?
Edit
Here are the latest updates on my Mac
A feature of OS X Mountain Lion is the ability to run only signed applications - that is, applications from Apple's app store - out of the box. This is a configurable setting, however, and can be changed in the settings screen you seem to have already uncovered. If you set the "Allow applications downloaded from" option to "Anywhere", your Mac should run applications downloaded from the internet as well.
Do be aware of the security implications of this, and consider changing it only when necessary (and reverting the setting after you've installed the downloaded application which you trust).
For more information, and screen shots, see: http://www.maclife.com/article/howtos/how_tweak_settings_gatekeeper_mountain_lion
I had exactly the same issue: Brand new out of the box MacBook Pro 13" 10.8.2 preinstalled. Went through exactly the same process outlined by the OP.
Resolved by:
The 10.8.3 update then reappeared and I was able to redownload and install.
Hope this helps
Best Answer
That is normal for iCloud tokens to time out. You will see it when you reboot, so the update was a coincidence and not causing the password request.
This setup seems to trigger more often if one of your user accounts on the Mac uses an iCloud password for the account or you have Back to my Mac or Find my Mac enabled in iCloud system preference pane.