The preferences definitely need a UI overhaul. They
should also use scrollable textboxes with selectable
lines. A "+" and "-" button would probably also be
handy, (I guess they would be "add" and "remove" on
Windows). The "-" button would delete the currently
selected line in the textbox.
Also, following the established paradigms for Mac OS X,
Windows, GNOME, etc., I think that "OK" and "Apply"
should save the settings to the file. Then the "Save
All Settings" button would be removed.
Lastly, all of the preferences should be in one panel
with selectable pages using tabs.