The centre of Prague is compact, and can easily be explored on foot. There is an excellent network of trams that get you around cheaply and efficiently. Late at night, taxis are plentiful to get you back to your hotel after a night on the tiles. Unless you plan on leaving the city, it is not really worth booking a hire car, as large areas are pedestrianised, and most attractions are fairly close together. It pays to take a city tour if you've not been before, that way, you'll have a sense of where things are, and allow you to get around more easily later.
