when they talk about preparation on GM level they mean that a player prepares SPECIFICALLY against his opponent.
He studies his games (that, being GM, should be widely available) and tries to find weaknesses/positions he's not good at/ and maybe prepare something specifically against that opponent.
When Alekhine prepared to play Capablanca in the 1927 title match, he studied the Cuban's games constantly, looking for weaknesses and stlye he could exploi. It worked. My free lessons program teaches you how to find your own weaknesses and elminate them. Once you know how to find yours, spotting them from a particular oponent is easier. My lessons program is on my website, you can find the link n the "abot me" section of my profile.
In addition to what has been said, home preperation also includes the GM's finding novelties to suprise their opponents.
At our level it is probably better we dont switch openings all the time, however if you feel comfortable in two openings, one aggressive one more solid, then chosing the one which yields positions you will enjoy more does help imo.
What is it when they talk about it in reference to world championship matches and how do I use it to beat my opponents in an OTB match.
What do I prepare? Openings? Middlegames? Endgames? And which aspects do I choose to prepare against a particular opening.
Also how do I know which opening to use against a particular opening? If my opponent likes to play aggresively do I choose something quite like the English Opening?
Sorry, for all the questions but I am really confused! :S