I use Avaya One-X for work.  I got the above error this morning.  I couldn’t find a resolution via Googling, and Avaya’s support is notoriously sucky.  BUT, I did find out what the purpose of Preferences.xml is.  It keeps settings like window positions.  Bearing that in mind, I figured before reinstalling I’d try blowing it away (renaming it, actually) to see if it would recreate.  It did, and the app came up fine.

Preferences.xml is located in

%APPDATA%\Avaya\one-X Agent\2.5\Profiles\[Profile Name]

on Win7/8.