Prefs are re-created if they are missing, so no, they aren't essential. They just save optional settings. Usually whenever an application is giving problems in OS 9 and earlier, trashing the pref for the problem application was the first and easiest troubleshooting step.

It used to be a good idea to regularly look inside the Preferences Folder (inside the System Folder) to keep an eye on what is happening there anyway.

There are at least three Control Panels that "map" which application opens a file

Apple Menu->Control Panels->QuickTime™ Settings (Browser Plug-In->Mime Settings) or (QuickTime Exchange->Checkbox->Enable)

Internet (Edit Sets->Advanced )

File Exchange (Scroll through the list)