Preferred position means in which position you want the WebCallOut to be shown related to control specified in TargetControlId. There are 2 properties that refer to preferred position, PreferredVerticalPosition and PreferredHorizontalPosition. The default value for PreferredVerticalPosition is Top and PreferredHorizontalPosition is Left. For instance, if the PreferredVerticalPosition is set to Bottom and PreferredHorizontalPositon is set to Right then WebCallOut will be shown at the BottomRight of the control specified in TargetControlId.
These properties will be applied if PointingPosition is set to AutoDetect.