When you choose the Preferences menu item from the application (Script Debugger) menu, you summon the Preferences window. It has eight preference panes. These pages describe the options on each pane.

The Factory Defaults button on each pane sets the options in that pane to the Late Night Software default values.

All changes to preference options take effect immediately — except for the AppleScript Formatting settings in the Fonts & Colors preferences, which have to be set with the Apply button (because in this case, you’re talking to AppleScript, not to Script Debugger).