I just got back from three nights in Prague. Beer in bars away from tourist centers (even just one or two blocks) could be found for about $1 for 500mL. We stayed in an affordable hostel. Food in tourist areas was on par with Western Europe, but if you took the metro a few stops outside of the center, we found places to eat for considerably less. We were not impressed with Czech cuisine, we found it like a bland German fare. That being said, there were affordable and tasty dining options, but I would not call Prague "cheap".