We use “I prefer” (simple present) when talking about things we always or generally prefer.
“I prefer watching action movies rather than comedies. They’re more exciting.”
“I prefer tea to coffee. I can’t sleep at night after drinking coffee!”
However, we use “I’d prefer” (conditional) when we are talking about a specific situation. We generally use it when we have several choices, and we want to express a preference for one.
“I usually like action movies, but right now I’d prefer watching this comedy. I’ve heard so much about it!”
“I’d prefer staying in instead of going out tonight.”
We also use “I’d prefer” to talk about hypothetical (unreal) situations.
“I’d prefer to live by the sea.” (I live in the desert.)