I just went on Hilton.com and went though all the steps for reservations at the Hilton Crystal City (Arlington, VA), Hilton Dulles, Hilton San Jose (CA) for Nov 5-7 at the Govt rate except for actually submitting the booking request.

No where did I see any requirement for pre-payment (in fact, right beside the "Book Reservation" button, it stated "$0 due now, no booking fees" and "Easy changes and cancellations") and the cancellation policy words were "If you wish to cancel, please do so 1 day prior to arrival to avoid cancellation penalties." (Don't get me started on "1 day prior" vs "6 PM day of arrival".)

So based on this limited sample and your experience, it would appear the pre-payment policy is property-specific, not chain-wide.

I know one normally associates the term "pre-payment" with "non-refundable", but what exactly did the hotels you talked to say about cancelling? Not Hiltons, but I have seen some properties where pre-payment is required, but you can still get a full refund if you cancel a week or so in advance. (I don't consider such a cancellation policy acceptable for business travel. Just pointing out that "pre-payment" does not necessarily mean "non-refundable")