Configuration file:
The full Config Plist is ~/Library/Preferences/com.googlecode.iterm2.plist
it seem that it may be used to store the defaults values at startup, but the main one is the first one.

Modifying/replacing the configuration file:
Preferences are cached in 10.9. See http://hints.macworld.com/article.php?story=20130908042828630.
If you edit a plist file directly or replace the plist of an application, the application will keep using the cached version even after you quit and reopen the application.

You can run defaults:
defaults read com.googlecode.iterm2
or
killall cfprefsd
to apply the changes:

Quit iTerm
Edit the plist
Run ‘defaults read com.googlecode.iterm2’ or ‘killall cfprefsd’
Open iTerm

Changes made with defaults are applied after you just quit and reopen an application like in earlier versions of OS X.

Extra info on iTerm2:
Good links that explains the custom keyboard settings:
General keyboards bindings:
http://blog.jcoffin.com/2008/12/06/mac-keyboard-shortcuts-iterm/
Moving one word right/left keyboard settings with Option-LeftArrow Option-RightArrow
http://hackaddict.blogspot.com/2007/07/skip-to-next-or-previous-word-in-iterm.html

Basically the best settings I found in Managing Profiles are:
– Keyboard – Global + 2 extra custom keys for word move in tern
Skip to Next or Previous Word in iTerm Using Alt / Option + Left or Right Arrow Keys
Open iterm.
Go to Bookmarks > Manage Profiles
Choose Keyboard Profiles on the left and edit the Global Profile
Map Alt + Left Arrow to Backward / Previous Word
Next to Mapping, click the + sign.
For Key, choose cursor left.
For Modifier, check the Option Box
For Action, choose send escape sequence
Write b in the input field.
I also checked High interception priority for good measure.

Map Alt + Right Arrow to Forward / Next Word

Next to Mapping, click the + sign.
For Key, choose cursor right.
For Modifier, check the Option Box
For Action, choose send escape sequence
Write f in the input field.
I also checked High interception priority here for good measure.
– Terminal – xterm-color, Western (ASCII)
– Display – Font: Andale Mono – chose colors and transparency as desired,

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