I think the easiest explanation (and Im still learning from Ryoken and others) is that "prep work" is a blanket prhase for make the car look as good as possible before the next step. Think about it like trying to building anything structural. Adding duct tape to a bad weld and then painting over it isnt going to look good, nor last a long time.
Start with the metal.Try to contour the metal to the original shape as much as possible. Whether you use a hammer, dent puller, replacement- doesnt matter, just you have to get as much base into the right shape. Remove any high spots, and bring up the low spots. The idea is that you want to use as little bondo (later) as possible.
I watched on those restoration shows, some guys dont even use bondo- THey can work the metal into perfection. They hammer, pry, lift, sand, scrape, until the metal is perfect. its beyond my skills, so I just try to get it as best I can, and then use a thin layer of bondo. After bondo, you want to sand the whole area until its perfectly flush, and smooth. A large block will help you in this process.
Then you want to clean the surface off, I've been told by these guys here that denatured alchol is great for removing any oils, and residue. After thats done, just primer.
Beyond the primer, Im still learning, so I havent gotten that far yet. My truck is just.. primered. /forums/images/graemlins/rotfl.gif