I'm incredibly frustrated with this game. I've had the same issues that many other users have had -- in my case, upon moving from the end of Episode 2 to the beginning of Episode 3, I've found that the game doesn't recognize my previous story choices.
I attempted the solution proposed (copying the larger prefs.prop file from either your My Documents folder to your Steam Apps/Walking Dead folder, or vice versa), but I've found absolutely no trace of a prefs.prop file anywhere in my Steam Apps folder. Subsequently, I copied my prefs.prop folder from My Documents to all of the various Steam Apps/common/Walking Dead/Pack subfolders (default, WalkingDead102, 103, etc.), and that did not work. The game still prompts me to generate story decisions when I click on my saved game and attempt to transition to Episode 3.
Can you please help? Here's the link to my support tool info: http://www.sendspace.com/file/j4ia0v