I agree with Scrabble, the The Three Osterisches (U Tri Pstrosu) is a great hotel.
It's right on the amazingly beautiful Charles Bridge (ask for a bridge view window when you book). It's very cosy and has a warm atmosphere. The staff were very friendly, and organized to have a bottle of Champagne on ice for when we arrived in our room. And it's in the centre of things between the castle and old town.
Its website is here;
http://www.upstrosu.cz/en/
You'll have an amazing time, but hunt out the bars in the streets just off the main tourist drags, where you can still find fine Czech lagers for 40p a pint! (Well, you could a couple of years ago anyway). Have fun.