Recovering Lost Users
In general, there seems to be two reasons why a user account and their home folder can disappear. The first is simply that you have (accidentally) deleted the user. Any administrator account has the ability to do this from the System Preferences.
The second way occurs when upgrading or installing Mac OS X from the install disks. If you inadvertently chose an "Archive and Install" installation, all users are deleted unless you choose to preserve them.
Luckily, in both of the above cases, Mac OS X keeps a copy of the user folder in case you want to get it back.
Recovering Deleted User Folders
In the Accounts section of System Preferences you can delete a user by selecting them and clicking the minus button. You are presented with two options - to keep a copy of the user folder (the normal way) or to delete immediately. Unfortunately, if you chose to delete an account immediately, it is almost impossible to retrieve it.
However, it is more likely that you kept a copy (the option with the big blue "OK" button). This copy is kept in the Users folder under "Deleted Users". You must be logged into an administrator account to have access to this folder. Look in here for the name of the deleted user you want to recover, and double click it. This will mount a disk image on the desktop that essentially the deleted user folder. Hold option and drag this disk image from the desktop to the Users folder in your Hard Drive. Now you have restored the user folder, but you still need to create an account for it. Skip down to "Recreating the Account" to do this.
Users lost during an Archive and Install
When you perform an archive and install without preserving users, your user folders are archived away along with the rest of the existing system files for your Mac. A new folder called "Previous Systems" is created in Macintosh HD that contains all the users from before the archive and install. If you have done an archive and install multiple times, you will have a number of previous systems. Choose the one that contains all the users you wish to restore. In here is a users folder containing each of the deleted user folders. Drag the ones you wish to restore to the users folder in Macintosh HD. Now you have restored the user folders, but you still need to create accounts to be associated with them.
Recreating the Account
If you just want to retrieve certain files from the deleted user, you don't need to go through the hassle of creating a new user. From any administrator account you can open up the deleted user's disk image or Previous Systems folder and copy specific files from it.