As I posted some time ago, some friends and I headed to Prague (and Hungary) for a few weeks of holiday in late Sept/early Oct, and here is a report on our dining experience in Prague:
U Sadlu (Klimentska 2, near Revolucni): Very cozy place with extremely friendly staff in a room reminiscent of a medieval hall, with armor and arms on the walls. Very Czech cuisine, with truly excellent cabbage soup (don't miss it!) and huge portion of assorted Czech-style cured meats as one of the options on the menu. I thought the meal was great, though in the spirit of disclosure I was alone in that opinion; my friends found the sausages, hams, more sausages and more ham a bit lackluster. Reasonably priced, though.
U Stare Radnice (in Stare Mesto, near the Castle): The menu here is not huge, but they have a nice range of dishes, all well prepared (from our experience). The venison goulash was a big hit in particular. Despite its location in a very touristy part of town, a number of locals were also in attendance and the meal was again not overly over-priced.
Kavarna Slavia (Narodni 1): You simply have to visit this place when in Prague, as it is one of the most significant of the city's many cafes, having hosted Vaclav Havel and other prominent dissidents as they formed Prague 77 and worked against the old regime. Alas, despite having been dolled up by the new owners, you will not likely return for the quality of the coffee or desserts here, all of which are over-priced significantly.
U Fleku (Kremencova 11): This is one of Prague's oldest (if not the oldest) beer halls, with Napoleon having at one time darkened its doorway. Despite the prevalence of tourists here, you cannot dispute the quality of the beer or the food, which is reasonably priced, too. The waiters come around with large glasses of the beer (which only comes in a dark variety) constantly, as well as glasses of Becherovka, a popular local spirit, which you can refuse if you so like. The meals here that we had were all great, including a stand out duck with sausages and slices of cured pork. The goulash here was also excellent. Prices again were reasonable.
Cervena Tabulka (Lodecka 4): This little restaurant is tucked away near Revolucni (not far from U Sadlu) in a small house that was badly affected by the floods of 2001. However that has all been repaired, and the cuisine in this eclectically decorated place was excellent. The menu includes a lot of exotic dishes for Prague, including rabbit leg and herbal potatoes served with entrecotes of beef. The desserts included a very unusual carrot panna cotta with orange sauce and a misnamed chocolate souffle (it was actually a molten chocolate cake). Wine list is pricy here, but has a largish selection of French wines. Not cheap for the food either, but the quality made up for it.
Vinny Bar/U Zavoye (Havelska 25): This is a wine bar upstairs from a very fancy white tablecloth restaurant in the cellar. The downstairs menu is extremely pricey, though it looked very interesting; we opted for the less formal dining offered upstairs. The menu was still very interesting, and we had a very good meal of duck thighs with mushrooms, venison stew (very tasty), and a perfectly cooked tournedo of beef wrapped in a strip of bacon. Unfortunately we were less lucky with our choices of wine. Thinking that we should take advantage of the chance to sample local Czech wines in a place that offered a large number of them by the glass, we had three different types before finally understanding why none of our local wine shops at home have a Moravian section... Nevertheless, they do have a very large selection of more traditional wines, including French, Italian, Hungarian, etc, so don't let this bad experience put you off!
Overall, we were very impressed with the meals we enjoyed in Prague, both for the ease with which we found good and interesting places, and the reasonableness of the prices. Should you go, you may want to pick up a copy of the Prague Post's handy dining guide to Prague, which we saw at a number of bookshops in the city (in English).