User Preference Files (UPFs) often get blamed for a lot of things -- in fact, it would not surprise me if they were seen by some as the cause for sun spots :). Seriously, that blame is very often misdirected. How? Well... there is a very big difference between cause and effect. Alleviating the effect (i.e. deleting your UPF) often does very little (if anything) to remedy the cause, which could be something much deeper and many times more serious. It is the cause that needs to be be figured out -- deleting a UPF will not do much other than hide that. The cause could come from any number of sources, which is why it is so important to find out what led up to the problem that you are having. It is like a broken window -- a window usually does not "break" itself -- something else is the culprit 99.999% of the time. If other things happen due to the window being broken, that still is no indication that the window broke itself. There is a very distinct difference there. Solving what broke the window is well worth every minute of investigation -- and often makes things work much better all around. Sure, the "quick fix" of simply deleting a UPF and recreating it may seem like the shortest path to resolution, and the "well-that-fixed-the-problem" perception is obviously viral, but over time, you are not really helping yourself (or anyone else, for that matter) all that much by deleting your user preference files.
This is not to say that User Preference File issues have been completely nonexistent*. Granted, a problem is a problem -- figuring out what the problem is should not be avoided. But before blaming (and deleting) the User Preference File for some "weird" thing you are encountering, it would be well worth it to stop (even briefly) and try to remember the things that led up to the situation where you are. Oh, and save the UPF instead of deleting it :).
The user preference file often is only one piece of what ends up being a fairly big puzzle. There really isn't anything in the UPF that can identify "well... there's the problem right there". However, determining if there is something "wrong" in the user preference can help in a process of elimination. You can use the rdump utility (now part of the MicroStation SDK) to "check" the user preference file. Two of the measures of diagnosis mentioned are A) logging of resource-file-related errors in the exception log files and B) notices being sent to the Message Center whenever MicroStation detects that the user pref file has been left open by an application (it then automatically closes the file). You should make a note of any such messages when you see them, as that could be helpful in tracking the cause.