Opponent casts {Prey Upon}, THEN attempts to go into a combat phase.
He kills my creature w/ Prey Upon, then proceeds to use that same creature to attack me after it resolves. Legit?
Yes, that's legal.
Fighting doesn't cause a creature to tap, so it can still attack, as long as it doesn't have summoning sickness.
Also, I believe the creature they used to kill yours will still have the damage marked onto it from the fight, in typical circumstances. They'll go into combat with less toughness than they had depending on the power of your creature from the "fight". They would hopefully be easier to kill in combat if you blocked with something else or threw a burn spell at it.
...And it survives the damage your creature dealt to it. Keep in mind the damage will stay marked on it until end of turn.