This property is useful when using ProtocolVersion.Ver30. By default all queries are prepared when using ProtocolVersion.Ver30. You should set UnpreparedExecute property to true to avoid preparing. In this case queries will be sent in 'simple query' mode - simple executing queries without preparing them on the server. This is useful when executing multiple queries. PostgreSQL server allows preparing only one query at a time, and it returns error if batch queries were sent.
UnpreparedExecute does not affect anything if ProtocolVersion.Ver20 is used, because this protocol is itself 'simple query' or plain text protocol. SQL statement execution is made without preparing by default.