Noun (Prep): Comes from identifiying one who goes to a prepratory or "prep" school (typically on the East Coast), or a school with the intent of preparing its students for college (often Ivy League).
Has come to be an label for those who conform to typical teenage behavior, in areas like clothing, school behavior, and sports participation, because preps usually are more ambitious and/or image-conscious than others.
Popular belief is that preps hate nerds/goths/punks/etc, however, generally, preps pay little attention to other "types," and those who hate preps with the most passion are those who were once preps and have recently gone away from their previous behavior, and often people who are posers intent on protecting their alternative-ness.
Prep has become to be nearly synonymous with conformist, to the point where most preps have been in denial of their typecast, and it is seen as an insult in the eyes of many.
Preppy is the adjective form, Preppily is the adverb.
The prep dreamed of going to a school that wasn't too far from where her quarterback boyfriend got a scholarship.
Bob wouldn't talk to Annie; He thought her interest in MTV and popular culture made her too preppy.
Tiffany started dressing very preppily over the summer, shedding her all-black dress code for the latest styles.