Prestretch is the "whipping", "recoiling", "twist", or "bouncing" motions a person does to create potential force, which is then released. It's what our muscles do to produce a lot of power without a lot of percieved effort, and it's the preferred way to maximize the force potential of muscle. Plyometrics is dedicated to using this in sports.
It's really the basis for a lot of natural motion. When you throw, you send the ball back a little, usually using a light grip, before throwing forward. When you want to jump high, you bounce really deep. For tennis, you have torso/hip rotation and the backswing.
What prestretch says about the backswing are the following:
1) Whatever maximal length you want with the swing, you want to reach that length as quickly as possible.
2) Therefore, you want as little as loop as necessary to have a smooth down-to-up forward swing. This is usually grip dependent, and part of why eastern grips can facilitate faster racket speed. (Though there are various mechanical changes one can do.)
3) However, and this is the rub: you want to reach that length
with as little right hand/arm effort as possible And this means a few things:
3a) Grip needs to be as relaxed as possible during the backswing. This is partially why having a high native grip strength-to-swing weight ratio is ideal.
3b) You want your hips, torso, and left hand to aid the right hand travelling backwards
3c) You don't want to delay your forward swing.
4) The more your extended position stretches the muscles along your right side (i.e. the kinetic chain of the swing), the more potential power you have. This for most people is a hand position almost completely behind them and around shoulder height.
However, step 4 is not completely desirable. The more you rely on prestretch, the more you also rely on timing and rhythm. Because you're letting the mechanics do the work for you, you yourself have less control once it's a go. That's partially why whether Federer can actually see the ball at contact point is not that relevant; because he uses so much prestretch action in his swing, he can't really correct it anyway. Ergo why it looks like every match, Federer needs some time to sync the other guy's strokes with his.
A common criticism of American academy tennis is that too many players rely way too much on prestretch created by torso rotation to crush the ball. This works fine when they don't have to move and are playing opponents with little shot variation. But then a lot of these players, who punish the ball during practice, lose most of their power during a real game, when they can't initiate prestretch mechanisms. Or they have problems with accuracy due to overcompensating.
Federer arguably has the finest example of a stroke relying on various prestretch mechanicism; it's in his initial racket face rotation, his straight-arm bend; his transition to elbow bond, his wrist recoil creating energy for hand rotation. That is why it looks like a sling-shot to us. Even his footwork is partially designed to use recovery steps and shifts in direction as potential energy to launch. Without good footwork, man, he's be screwed.
And without question, Roddick is the finest example of said in the server.