I've been to Budapest, Prague and Vienna (2 times). I think it's great if you just want to do Prague and Budapest. I loved both cities.

I stayed in the Castle District in Buda and loved the charm in the early morning and evening, even though it was across the river. I visited the Fishermen's Bastion when it was virtually empty. Also, the stunning views of the Chain Bridge, Danube and Parliament from my room helped. Visit the Ruszwurm Cukrászda (pastry shop) in the Castle District for their famous cream pastry or kréme. I also enjoyed climbing the tower of St. Stephen's Basilica for the beautiful views. The Museum of Fine Arts is worth a visit too, if you like art (old masters).

I don't remember if anyone posted about the Castle in Prague, but I really enjoyed it, especially St. Vitus' Cathedral. The midday light shone through the beautiful stained glass windows casting magical projections on the white walls. I also loved going up in the Old Town Clock Tower; their were stunning views of the Church of Our Lady Before Tyn.

Do try to visit Cesky Krumlov if you can. It is so charming!