I think, there are some advantages using language prefix.
If we have more than one forums using similar applications (maybe it is a bit rare though), we can share the language (I think).
For example, Link Directory and Showcase Forum can use the same newthread language prefix variable, the value is Submit New Site.
But, there are some advantages for the second one too (define a list of overwritten language variables).
Users know whatever language variable can be overwritten. It is easier to use (I think). Overwriting each language variable can be done via Admin CP while setting up an application.
Ugh... It is hard to choose which one is better, Yumi