Thanks derek. The advice worked.
The situation actually happened just last night as I was trying to render a whole sequence. I did exactly what derek instructed which was dump the following files:
com.apple.FinalCutPro.plist
Final Cut Pro 4 Preference file
Final Cut Pro v POA Cache
I had a bitch of a time looking for them so i just ran the find tool to look for it. Its pretty scary seeing that I had my old preference file for final cut express (i was using that before going to pro). After that, i repair permissions through using the disk utility.
For now, what should I do to further prevent this type of situation? This progression stopper was a great panic-attack.. -_-.. When I started again, all my preferences were reset to default settings and everything.. Should I be aware of those type of things happening when I customize my settings?