Preps are the preppies...this refers to those wearing white oxford button-doxn shirts, or izod lacoste or Ralph Loren and penny loafers without socks, or with argyle socks. These are the well-off kids whose families ski in the winter and golf in the summer, and spend vacations on a lake...Most want to go to Smith or Williams or Bryn Mawr or UPenn...get the idea? Not sure where the word PREPPY comes from.
Prep and preppy are short for preparatory. A preppy is a student or former student of a US preparatory school, or someone of that type (often identified in the way they dress), which is taken to be someone from a privileged background.
I agree with the above. As a stereotype, which is what the movie is dealing in, preppies are expected to be very conventional in their values and interests. If the stereotype is followed to an extreme, they would be boring and silly.