whats the best place to stay in Prague on budget?
I stayed in the Residence U Černého Orla in the Mala Strana area, right beside Charles Bridge. The location is excellent, the rate includes a great breakfast and, although it is not really budget accommodation, you will usually get a room for 2 with breakfast for about €100 per night. Because of the great location you will save on transport as you can pretty much walk everywhere.
BestPlace to stay PERIOD is the Palace Praha hotel. Expensive, but worth it. On a budget, look for a room to rent outside the city center near a bus or subway route. May not be luxurious, but will be clean and neat and may come with a breakfast. Iv'e done both and enjoyed both.