The pref folder can become corrupted and cause LW not to function correctly. Deleting it(while LW is completely shut down) forces LW to create a new one and that should fix any corrupt files in that folder. Kinda like hitting a reset button.
Deleting it changes all the settings in LW back to the default, so if you've made any changes to the options, you should make a note of them before deleting the pref folder. That way you can put them back the way you had them.
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