Currently this is the available bugfix (support library rev. 23.1.0)

So, Google gives us a solution which I think is not ideal but works. According to this, instead of using

<item name="preferenceTheme">@style/PreferenceThemeOverlay</item>

one should use

<item name="preferenceTheme">@style/PreferenceThemeOverlay.v14.Material</item>

This also means that even though you are using only v7, you have to include the v14 lib as well because the said PreferenceThemeOverlay.v14.Material is only available in it. Since v14 requires your min SDK to be set to 14 or higher, you can't use this workaround if you are also targeting devices below this level.

Another bug is that on API levels below 21 the PreferenceCategory elements' text color is not the accent color you define in your style. To set it to your accent color, you have to define a preference_fallback_accent_color color value in any of your resources files. Example:

<resources>
    <color name="accent">#FF4081</color>
    <!-- this is needed as preference_category_material layout uses this color as the text color -->
    <color name="preference_fallback_accent_color">@color/accent</color>
</resources>

And another bug is that the PreferenceCategory's text style is italic instead of bold is not bold. In order to fix this, you have to re-define a so-called Preference_TextAppearanceMaterialBody2 style (this is used by the PreferenceCategory below API level 21) in any of your styles file:

<style name="Preference_TextAppearanceMaterialBody2">
    <item name="android:textSize">14sp</item>
    <item name="android:fontFamily">sans-serif-medium</item>
    <item name="android:textStyle">bold</item>
    <item name="android:textColor">?android:attr/textColorPrimary</item>
</style>

And another bug (officially it isn't) is that you cannot set any EditText-related attributes (e.g. inputType) to your EditTextPreference. If you still want to do that, scroll down a little, the workaround is in the Interesting things part.

Interesting things

These are not considered bugs but they can give you a headache.

Creating Preference programmatically

When you create a Preference, you have to pass a context to its constructor. When you pass context by calling getActivity() or getContext() on your PreferenceFragmentCompat, you give the newly created Preference a context which is not styled with your preferenceTheme but your Activity's main theme. To pass the right context object, you have to do this:

Context ctx = getPreferenceManager().getContext();

Preference preference = new Preference(ctx);
// setup your preference and add it to a category or the preference screen

And voilà, now your preference instance is material styled (or whatever style you set as your preferenceTheme's preferenceStyle).

Setting `InputType` and other `EditText`-related attributes on EditTextPreference

EditTextPreference doesn't forward XML attributes that should influence the input type or other aspects of the shown EditText. The official statement is that this is not a bug, but I think it's a serious design flaw. Anyways, after a few hours getting through the decompiled source, I came up with a solution that works for now.

I introduced 3 new (fix) classes:

EditTextPreferenceFix replacing EditTextPreference (in your XML too)
EditTextPreferenceDialogFragmentCompatFix replacing EditTextPreferenceDialogFragmentCompat, you won't interact with it, just needed for the fixed experience
PreferenceFragmentCompatFix replacing PreferenceFragmentCompat as the base class of MyPreferenceFragment

You need a few updates to utilize this fix.

Update MyPreferenceFragment's base class to PreferenceFragmentCompatFix (note the Fix ending):

public class MyPreferenceFragment extends PreferenceFragmentCompatFix { /* ... */ }

In your preference XML, use EditTextPreferenceFix instead of EditTextPreference (again, note the Fix ending):

<EditTextPreferenceFix
    android:inputType="phone"
    android:key="edit_text_fix_test"
    android:persistent="false"
    android:summary="It's an input for phone numbers only"
    android:title="EditTextPreferenceFix" />

I recommend using the normal EditTextPreference version first as it provides auto-complete for the attributes, and adding the Fix ending when you're testing / releasing the app.

If you use EditTextPreferenceFix, you can also access the shown EditText by calling the preference's getEditText() method. Example:

EditTextPreferenceFix etPref = (EditTextPreferenceFix) findPreference("edit_text_fix_test");
int inputType = etPref.getEditText().getInputType();

Known bugs that cannot be fixed

When a Preference's dialog is showing and the device's orientation changes, the app crashes. Bug report

Fixed bugs

And one more bug is that PreferenceThemeOverlay.v14.Material has no correct background selector. To overcome this, you should add the following line to your main theme style:

<item name="android:activatedBackgroundIndicator">?android:attr/selectableItemBackground</item>

Note that I did not test this background-fixer solution extensively so it might mess up other parts of your app. This is just a temporary (i.e. experimental) bugfix until Google releases either a less buggy version of the lib or the source code so we could fix it.

since 23.1.0

And one more bug is that on pre-lollipop devices the Preference items' title is just too big (compared to the ones seen on API 21+). To fix this problem, add the following line to your main theme style:

<item name="android:textAppearanceListItem">@style/TextAppearance.AppCompat.Subhead</item>

Note that this could mess up other parts of your app because the textAppearanceListItem is a global attribute, so you should test your app thoroughly after applying this fix.

since 23.1.0

Android-Support-Preference-V7-Fix

~~Android preference-v7 support library doesn't contain material design layout files so the preferences screen looks bad on API 21+. This is a temporary fix until Google fixes it.~~

The latest (23.1.0) preference-v7 support library has some other issues, see above.

The issue has been reported, you can find it here: https://code.google.com/p/android/issues/detail?id=183376

Prerequisites

This demo / bugfix is set to work on API level 16+.

License notes

You can do whatever you want except where noted, especially the following files downloaded from the Android framework base (these are also modified):

preference_category_material_custom.xml
preference_dialog_edittext_material_custom.xml
preference_information_material_custom.xml
preference_material_custom.xml

oakkitten/Android-Support-Preference-V7-Fix