This is the first time since upgrading to FCP 7 that I have to trash my preferences and they are not in the library under Preferences.

Is it different in FCP 7 compared to FCP 6?

If your are on osx mountain lion do the following:

open finder, click on Go
hold the Option key down, and you will see "Library" appear - click on Library
scroll down to the Preference folder
in the Preferences folder, delete this file
com.apple.FinalCutPro.plist
in the same Preferences folder, scroll down to the FinalCutProUserData folder
and delete these three files -
Final Cut Pro 7 Preferences
Final Cut Pro Obj Cache
Final Cut Pro Prof Cache

This worked for me, as I had to trash my preference the other day!
Thanks to How To Delete Final Cut Pro Preferences - Bob Zelin (http://www.bobzelin.com/how-to-delete-final-cut-pro-preferences)

Thank you Per,

The "open finder, click on Go
hold the Option key down, and you will see "Library" appear - click on Library" put me in the proper library.

I kept ending up a the wrong library and could not find the Final Cut preferences. Your method put me in the right library. Thank you for the very quick response.