My colleague is using something she calls Preferred Datatypes when working but I am not sure what she is talking about?

You can define some of the logical datatypes to be your preferred logical datatypes (or preferred domains). In the Preferences you define a list of logical datatypes as preferred logical datatypes like this:

 

Then when designing the attributes you enable Preferred and will only see those logical datatypes, that were defined as preferred, in the list.

 

Now you do not need to go through the whole list of potential logical datatypes, only the ones that you find useful.