"Be Prepared" is the scout motto, and it's just as valuable a motto for the game table as the Appalachian Trail. Even GMs who run their games extemporaneously, you'll find, have done quite a lot of preparation.
I accrue paper. I write up handouts to keep the players from asking questions about things they should have written down. I build props -- especially props of anything written. I draw pictures and maps, and download graphics off the internet for handouts. I learned from a fellow GM that if you show the players a photo of a person who you think looks like your NPC, that NPC sticks in their heads a lot better. "Oh, it's that detective who looks like Wesley Snipes."
I also organize things. I use folders, baggies, and tupperware to sort handouts, stats, maps, tokens, map tiles, etc. Obviously D&D has a lot more junk than other games, so for a game like Vampire, I don't need the baggies and tupperware. I'm naturally somewhat disorganized, being an ENTP on the Myers-Briggs scale; so I also tend to lose stuff a lot, even despite this effort; though I think my job has been making me better at it.
I know GMs who are very different from me as well.
Some GMs scribble relationship maps on scrap paper, make song playlists for their NPCs, or write short stories about them. If you've designed a game about NPCs working against each other, it may actually be more valuable to write stories about them to get their quirks, personalities, motives, and mannerisms clear and cemented in your head than to write out stats, draw maps of potential battle zones, give them equipment, etc. Far better, I think. I mean, you can ad-lib stats, too, right?
What this says to me is that not only do we GMs have a personal prep strategy; we also tend to vary it based on the game. Like all things we do, we should be intentional about it. So think about what your game is about. That should tell you the things you need to be ready for the most:
(Note: When designing a whole campaign, this strategy can help you pick a system!)
Is the game about daring adventure? Then preparing skill DCs and combat stats is important. You need the players to feel that sense of danger and you need to offer them risky strategies that really pay off, and that takes some real work.
Is the game about intrigue and scheming? Then you need to get into the heads of your NPCs. Maybe you write short stories, or write letters and prop notes in their voice. Maybe you spend time finding pictures of people who look like them on a google image search. Maybe you design a villain based on a Bond villain and rent the film to get the mannerisms right.
So how about you?
What's your preferred prep strategy?
Have you ever found yourself using a very different strategy because the game called for it?