I was in a very similar situation to you last year when I was offered a state school that I didn't like. We went with the prep.
In my DD's school there is a massive difference between their way of teaching and a state reception, the prep do very little learning through play and it is formal lessons from day 1, DD gets homework (a new reading book daily and 2 pieces of written work a week, plus holiday projects) she also gets spellings and maths tests every week. She has weekly french, science, music, drama, dance, gardening and cookery lessons. So it is worth asking about the curriculum as it's not necessarily the same as state.
Her class are often taught in small groups and even 1 on 1, homework and class work is differentiated and they all have different spellings but, as teacherwith2kids said, at some private schools they are all taught as one so that's also worth checking, personally I wouldn't be happy with a school that didn't differentiate work.
Depending on the private school some parents and children are rude and stuck up, however that's not true of all schools, DDs friends are lovely and the parents are very friendly, the majority of the parents are making sacrifices to give their children the best start and are actually just down to earth normal people, there are one or two who are a bit over the top and competitive but there are parents like that at every school, state or private.
To be honest it sounds like you already prefer the pre-prep and are just worried about what your friends have been saying, I had this with my friends too, I am the only one of my friendship group to have sent their child to a private school and there were a lot of comments about why I shouldn't (private schools are for snobs, its not fair to buy an education, DD will learn to be rude, the children will be stuck up etc.) DDs manners have actually improved since starting and none of her friends are rude or entitled, they are in fact all lovely children who play normal 5 year old games and the parents are no different to the parents at DS's state school.