First of all, all those rumors you've heard about Czech beer are true. Suffice to say that pivo (beer) was one of the few Czech words we managed to learn.
That being said, Prague does not seem to be a great food town, albeit my experience was limited to four days and narrowed by a preference to patronize Italian restaurants in Italy (or Chicago, for that matter).
But there are three restaurants I'd return to, all of them in Mala Strana, within a 1/4 of a mile of each other (and spelled with accents I'm not including):
1). Club David (on Trziste St., right up from the USA Embassy), but only for the special Czech menu--potato soup, a terrifically rich venison goulash, and pancakes topped with whpped cream and a hot wild blueberry sauce--a real value at about $25. The rest of the menu was Continental, a la carte, higher priced, and IMO unmemorable, altho I must commend the waiter for his honesty, who, when interrogated about the freshness of the fish, replied, "Well, you know, Prague is very far from the ocean . . " A very pleasant and comfortable just-like-a-living-room setting, tho.
2). Vindrna U maltezskych rytru (Enoteca at the Maltese Knights, Prokopska 10): A short menu, and somewhat hit-and-miss, but worth a try for lunch or dinner. Our hits were the game on crouton opener; the fettucine with goat cheese, fresh spinach and nuts; and the very large duck breast.
3). U modre kachnicky (Blue Duckling, Nebodviska 6). The real winner. A wonderful menu with many game, duck, and Czech options. The best sauteed foie gras we had since our last visit to Perigord, along with excellent roast duck (in a thick plum sauce), wild boar (in a tart mushroom sauce), and perhaps the best apple strudel we had in Prague (and we had a lot). Dark, opulent, Belle Epoque interior, with an unobtrusive piano accompanimen. A bit pricey. We topped out at about $150 for the two of us (saving a little by choosing a Moldavian wine, without regrets). If we'd had had another night in Prague, we certainly would have continued to explore the menu.
Two other notes:
1). For efficiency, value and service, the best Metro system we've ever experienced. Stations can be a bit difficult to spot (they all seemed to be inside buildings), but it made the choice of an outlying hotel (ours was in Vysehrad) a very viable alternative.
2). The new Kafka Museum: Far from the Disneyfication we feared, it was an honest attempt to explore the Life and Work with particularly strong exhibits on FK's Prague roots. A atmospheric setting, too, that here and there was appropriately unnerving. Put it on your list.
"The fork with two prongs is in use in northern Europe. In England, they’re armed with a steel trident, a fork with three prongs. In France we have a fork with four prongs; it’s the height of civilization." Eugene Briffault (1846)