This is a triky question. It depends basically on the player.
If you are new to tournaments, I would recomend you to play some games on the same setting time of the tournament, for example 1 hour each, and write down each move (tournaments force this), and so and so, so you get use to the dicipline of the tournament. The more you can replicate tournament conditions the better. Many people are good players but their performance suffer becouse they are not use to notated the games and the dinamics of tournament games. So don't be the guy who plays 200 points below his real game becouse is not confortable/doen't understand the tournament dinamics.
About the study of the theory, do what all the top players do (know your enemy), find out what other top players will show up to play, then get some database of their previus games on other tournaments, and study what they play. Focus on opening theory, and variants they show weak knowledge. You can also research the players preferences, some players hate when the Bishop take their knigths so do that, even though we know a bishop worth more in points you compensate on disconfort to the other player.
If you don't want to do this research and study the players, don't waste your time preparing something the others will no play or even worse know way better than you do. For this matter, Prepare a opening on whites and master it, I mean it master it, you will surprise them the first tournament the second one they will be ready for you. So another option is to learn the positional principles and play to archive them and if you do good you will have survived the oponent memoriced opening and then both of you will be on midle game.
And study your own games too. Be critical, doesn't matter if you win or lose the game, study it anyways, rotate the board so you can see what the other player was seeing, and question yourself about your own game, sometimes you are no sure of your move but you made it becouse time presure or other factors, later on go back to the position and analice it with all the time you need to understand what was the best move and evaluate the move you did.
If you have the oportunity (or the money) to get a coach get it, it worth the money, this website have very reasonable prices, consider getting one if you are serius about becoming profecional.
There is lots of tricks and stuff you will learn about. But this is a good starting.
I just want to know how chess players prepare for a tournament. I will be joining the "NBS First Move Chess Tournament" on January 7, 2012. Yesterday, I had a winning streak of 6 games. But still I wanted to improve, this morning I spent 5 hours studying the French Defense. I analyzed the lines well so I expected to play good today. However, my first live game today here in chessdotcom was a loss. I don't know if it was because of the mind-crushing studies I made earlier. It really hurt my performance today, I thought it will serve me good. So what should I do to prepare for a tournament? Does studying openings affect my games? How could I play well like I did yesterday? And what is the key to improve? Because I know that there is always someone out there trying to be better than me.