It depends how long you’re going for.
If you only have a day I would recommend seeing the castle and having a good explore around the old town where the castle is situated. If you head just off from the new square you can find plenty of restaurants that aren’t as expensive or tourist-oriented as those on the square itself. A meal for two with a few beers should probably only come to £8 or so. Try dumplings and goulash and commune with the culture via the hearty cuisine!
If you’ve got a couple of days I think the best way to get a feel for the city is to have a really good wander about to see some of the residential bits away from the main tourist areas. The architecture is beautiful to look at and there are lots of shops and cafes dotted about. Try taking the train up the side of the hill (on the same side of the river as the castle) to the big radio mast (you’ll see it when you’re there) and then walk through the park back to the old town.
In the evenings there are always Jazz and Classical concerts – you can usually buy tickets on the door or at the tourist information centre - as well as a club scene.
If you are going to buy a guidebook, the Lonely Planet one is not too bad but I found it oriented more towards the professional city-breaker rather than the on-the-cheap student traveller. The maps and café guide were very good and the bits on history were very interesting.
Contrary to reports I had been given before going, most of the restaurateurs and shop owners have a good command of English so language wasn’t a problem. I took a phrasebook (although I only really used the quick reference bit for please, thank you, two and beer) and made lots of Czech people smile at my clearly shaky attempt at their language.
My only other bit of advice is to wrap up if you’re going in the winter. It doesn’t seem to get that much colder than it has been in the UK this year but any wind really brings the temperature down.
