My niece competed Prep Op 1 last winter/spring between her L3 and L5 compulsory seasons. She did so well in L3 and Prep1 that her coach skipped her past L4 and into L5. She just finished up The L5 competition season and will be competing in Prep Op again. Here in TN, there are three levels to Prep. At Ashleigh's gym, the PO1 team is made up of the girls who competed in L3 during the fall. PO2 is L4 and possibly L5s. Whether the L5 girls make it to PO3 depends on the skills they pick up during the competition season. One nice thing about Prep is that they can move forward/backward during the competition season (within certain guidelines). Ash's coach has given the girls certain "goal" skills they need to master in order to move to PO3. Not all gyms compete Prep. Some stick to compulsories. The girls like it though because they don't have to wait until Level 7 to pick their own music and they can switch around their routines to highlight their best skills while working on new stuff all the time in practice. Ashleigh learned so much in Prep 1 last year, she's very excited about being Prep 2/3 this year. I wouldn't really say it's for girls who don't want to work as hard though... not at all. Prep practices can be just as hard, if not harder than the compulsories. They are constantly working on multiple skills and the routines are ever-changing. It's alot to keep up with. And because of the weight certain skills hold, there is a push to get the harder stuff... instead of just learning one or two "newer" skills, they are learning several!
As for using Prep to get to Level 7... actually that is kind of what happens here. Ashleigh's gym does not have a Level 6 team. Her coach, while realizing the importance of the compulsory routines much prefers Optional competition where the girls can use their individual talents. She says compulsories build "gym robots" who all look, act, and move exactly the same. Optionals allow the individual gymnast to shine. Girls at her gym compete three compulsory levels (3,4 & 5) then when they are good enough, they "score out" and go to Level 7. They stay at Level 5 until they are ready... this is where the Prep competitions come in. They will compete at the Prep Op 3 level and be required to make a certain score on each event and the all-around. If they don't, they are back in L5 that fall... if they do, they are L7.