Q1. I want to know if someone who knows my login password steal my MBA and reinstall the OS. After the reinstall, if he/she install prey and register the device under his account then would I be able to get report or what?Q2. Will I be notified about if someone else registers the same device under his / her prey account?
Short answer: nope, on that scenario you're screwed.
I think you should contact Prey directly regarding these questions for a broader explanation, as these are legitimate customer concerns.