That certainly wasn't my experience when I was there a few months ago. There were dozens of Eurotel shops all over Prague, and they were happy to sell me a SIM card. I believe it cost the equivalent of about $10 and it came with some calling time as well.

I brought an unlocked phone, but if I'd needed one, I also heard that Prague is a good place to buy a cheap unlocked phone. There are a lot of pawn shops which sell used phones, and I saw some as cheap as 650 Kc (less than US$30).