11 Nov 1996 updated
As of Version 5, PowerDesigner has added a Preservation tab in the CDM Generate Physical Model window:

While at first glance, these check-boxes may seem innocent and useful, we have had considerable excitement trying to figure our what they do and how to manage the generated PDM. Even a document provided by the PowerDesigner development team in Paris didn't clarify the issues. This paper is the result of our investigations. Your comments and additions are always welcome.
We have not repeated all of the text from the help/NFO files, only that which is relevant to the discission.
Paragraphs in dark blue like this are our comments.
Thus there is no way to recover an accidentally deleted reference in the PDM without also loosing all free-form graphic objects and all graphic properties overrides (shape, position, color, line style) in the PDM as well as detaching all displayed objects added in the PDM.
This is an unconditional regenerate of all descriptions from the CDM into the PDM, rather than a means of refreshing only a root inherited portion.

Note that the FK in Ent_2 does not match the PK in Ent_1.
If these two Preserve domain notes are both correct then there is no way to effectively delete a PDM domain other than from the CDM.
To succeed, each of these requires that Preserve domain be ON and the appropriate preservation option for Data type, Check, or Cardinality respectively. Since those three settings also control generation of data items, there is no way to preserve these settings relative to domains and without also preserving them as they apply to data items.
Since this does not differentiate between a rule Description and its Expression, one is forced to make all changes to rules (including code in the Expression section) to avoid loosing some portion of the changes on generation of the PDM.
Business rule expressions (i.e., code) in the PDM will be discarded
Our simple tests indicate this is false (at least in some cases)
Our simple tests indicate this is false (at least in some cases).
Our simple tests indicate this is false (at least in some cases).
If the two Preserve business rule notes (ON and OFF) about deletion are both correct then there is no way to effectively delete a PDM business rule other than from the CDM.

The above setttings serve us well as a starting point. However, there are several shortcomings as the model progresses:
Preserve graphics ON will maintain changes to graphic look and layout in the PDM. Unfortunately, PowerDesigner has coupled look with existence so this option also preserves add and delete actions taken at the PDM level. Thus you cannot resync the look of the PDM to the CDM without also blowing away object additions adn deletions in the PDM.
With Preserve description ON, descriptions embellished in the PDM (e.g., FK column role descriptions) will survive but changes to any CDM root descriptions will not be regenerated downward into the PDM. This is how PowerDesigner operated prior to Version 5.
Conversely, with Preserve description OFF, you can regenerate CDM descriptions downward but any local changes to the PDM are lost.
Three options suffer from an inescapable contradiction:
These are all necessary to generate changes to the CDM downward - changes which are legitimate and likely to contine. On the other hand, these same three sets of properties are the targets of important "modifications" in the PDM: check constraint SQL, PDM domain extended attributes, and business rule experssions, for example.
These comments were made regarding PowerDesigner Version 5.1.0. With the imminent release of V5.1.1 and "Comet" about to enter beta, the issues raised here may soon be moot. We certainly hope so!