AFAIK, it does prefer underfull boxes to overfull ones,but sometimes the penalties work out such that it has to put in an overfull anyways (IME really long words that it doesn't know how to hyphenate correctly are usually the culprit, and it's more frequent in two-column than single column layouts). You can probably set it to be even stricter though by tweaking the penalties for underfulls and overfulls. The details escape me, but it's probably pretty easy once you find the right part of the TeX book to consult.