A common complaint that GMs hear is that they're unprepared. Another common complaint GMs hear is that they've overprepared. How's a GM to know when she's hit that sweet spot, and the level of preparation is Just Right?
Preparation is all about the GM's confidence in what is the game's potential. GM sit and wonder if the thing is really going to come off. Are folks going to have fun? Will someone throw me a curve I can't handle? Will some bright player figure out the solution in the first five minutes?
Because the game almost literally doesn't exist until the Players touch it and get it all mussed up.
So the answer to how much prep?
Ask the butterflies in your stomach.