An interesting article in the New Scientist looks at solving Darwin's Dilemma, that is, in Darwin's words from the first edition of origin of Species, "If my theory be true, it is indisputable that before the lowest Silurian stratum was deposited... the world swarmed with living creatures. To the question why we do not find records of these vast primordial periods, I can give no satisfactory answer."
"Why did animals evolve so late in the day? And why did the ancestors of modern animals apparently evolve in a geological blink of an eye during the early Cambrian between about 542 and 520 million years ago? A series of recent discoveries could help explain these long-standing mysteries. These findings suggest that the first animals evolved far earlier than we thought, perhaps more than 850 million years ago. The really extraordinary part, though, is that these early animals may have completely transformed the planet, paving the way for the larger and more complex animals that followed them."
If you read the article in full you find many expert's informed opinions on the matter. Not surprisingly, bacteria play a strong role in almost all of the theories.