Wow. It might be because I had a keyboard plugged in? I was using that for inputting text on the setup of the game. I wonder if that will fix it because no - my UI was weird. It certainly wasn't a XMB style thing. I'll have to try that later tonight.
I don't know if the retail game does it (haven't gotten my copy yet), but in the beta you got asked to pick which setup you wanted when starting your character. It's probable that you flicked it over to the Keyboard setup by mistake.