I had wanted to stay in the middle of the action, but wound up staying in a residential area (as essxjay prefers). I found it very easy to get around on the tram. I'm glad I wound up on the outskirts of the city.
It is up to you where to stay; if you like quiet stay in the residential area.
Many people speak English. However, I think it would be nice to learn some Czech phrases.
Get a tour book to see all the sights such as Prague Castle and Charles Bridge. The city is a great walking city. If you have a lot of time you may want to consider day trips to outside the city. I have not done this but friends have (these side trips are listed in the tour books).
Like any major city, beware of pickpockets. A woman asked me for a cigarette. I was suspicious and reached for my wallet and she had it in her hand. She was very smoothe.
Food and drink is very cheap.
You'll have a great time. I can't wait to go back.