When I was in Prague I stayed at the Hotel Palace Praha. It is a beautiful hotel. I really enjoyed it. I thought the location was perfect. It was only a few minutes walk to Old Town Square and across the street from the Mucha Museum. The staff was very pleasant. There is a very nice bar just past the lobby. I also found the best exchange rate at the hotel desk.

http://www.palacehotel.cz/content/en/1.php