As most of "tourist" Prague is now divided into areas 1 to 10. It's worth shedding a little light on what to expect from each. For all references to the "river" direction, if you were standing on the Old Town side of the river and were facing the castle the river is flowing from right to left hence everything to the left is "downriver" and everything to the right is "upriver".Prague 1
By staying anywhere in the Prague 1 district you will put your self within 20 minutes walk of most of Prague's tourist attractions. The three main elements of Prague 1 are the Old Town, the New Town and the Lesser Town (which also includes the castle area). Prague 1 contains the highest concentrations of accommodation, bars and restaurants. The Old Town is the geographical centre of Prague containing a lot of pedestrianised areas but the bars and restaurants are considered to be more expensive. The New Town encloses the Old Town against the river and includes both Wenceslas Square and Republic Square. The New Town is seen as being a bit "louder". Conversely the Lesser Town (and Castle) are considered the quiet areas of Prague 1. The Lesser Town (Mala Strana) and Castle are the historical centre of the city with few bars and no loud clubs etc.
South and south west of central Prague extending about 1km further than the Prague 1 boundary following up river. Extends around the east part of Prague. Includes the areas called Vinohrady and Namesti Miru. Well within the metro area. Common to find street names which are countries or capital cities around Namesti Miru. To the south this area ends at Vysehrad (Nusle) on the Prague 4 border. Currently in this border area you'll find the Fox apartments and the Hotel Union amongst others. On Vinohradska you'll find the Palac Flora shopping centre, the front of the centre is in Prague 2, the rear borders the New Jewish Cemetery which is Prague 10 and the next closest road is in Prague 3.
On one side it has a border with Vinohradska starting at the Jiriho z Podebrad Metro. On the far side it borders with Prague 8 and extending away from Vinohrady this becomes Prague 10. The biggest residential area in Prague 3 is called Zizkov. On the Prague 8 side it is accessible by bus and tram. Prague 3 is a working class area somewhat affected by petty crime in the Zizkov Area. I would not park around here overnight. On the Vinohradska side you have the Hotel Anna and Hotel Claris plus apartments on Slezka. On the Prague 8 side the main road is Seifertova and hotels in this road include the Victoria, Ariston and Olsanka.
Going south down river for 3 km, on the other side of Prague 2 you come to Prague 4. Lower level accommodation (pensions and hostels) are largely grouped around Podoli and Branik on the river. The 4* hotels are around Pankrac/Vysehrad. The river side has a tram and bus service only. From the city, heading towards Brno you leave Prague by crossing the Nusle Bridge and the far side of the bridge is Prague 4. On one part, Prague 4 stays close to the southern ring road, extends all the way around to the areas of Pankrac and Krc and finally to Branik on the river. The 5* Hotel in the Pankrac area is the Corinthia Towers. 4* Hotels nearby are the Panorama, Holiday Inn Congress Centre and Barcelo. There's a pair of 3* called Otar and Oya. Prague 4 is heavily residential and has metro stations from Vysehrad extending out 4km to Opatov and Haje (end of line). There are many small hotels and pensions in the area. At the far end of the area are the Hotel Opatov, Hotel Top (4*) and Euro Hotel (3*). The Opatov and Eurohotel are 10 mins walking distance from their respective metro stations. Top Hotel is about 20 mins but has a regular bus 115 service. It is most important to check transport details unless you want to spend out on taxis. The town of Hostivar marks the Prague 4/10 border.
We go back over the river for this area. Extending down river from Mala Strana all the way to Zbraslav about 7km to the south. On the far side of the castle it extends away towards the Airport. The bigger hotels in this area include anything in Ujezd (Roma, Riverside) or Andel (Andels Design, Movenpick) and Smichov (plus botels Admiral and Vodnik). The area is semi residential with some light industry. The last metro in the area is Smichov but the tram now extends to Hlubocepy which puts it a 5 minute walk from there to the Best Western Hotel Smaragd. Prague 5 is the biggest Prague area.
From the castle this area extends west and north to it's boundary with Prague 7. The most popular area is Dejvice with it's fast connection to the Airport and the Dejvicka Metro Station. Prague 6 is heavily residential and contains the highest concentration of Embassies and Consulates in Prague.
This area is to the north of Prague 6 and extends down river from Letna including the areas of Troja and Liben and Holesovice. These areas suffered in the flood of 2002. Troja is the home of Prague Zoo. The biggest concentration of accommodation is in the Holesovice area (Rivertown market). Hotels in this area include the Park Hotel Veletrzni, Extol Inn, Sir Toby's Hostel and the Duo. Holesovice train station has a metro but, most of the area is served only by bus and tram. Closest metro to the Duo is Ladvi (800m).
On the other side of the river from Prague 7 and the other side of the highway from Prague 1 you are in Prague 8. Most people know the area as Karlin although it begins at Florenc and extends down river past Ceskomoravska metro (O2 Arena). I've now written a special Karlin Area page to detail my experiences of working there between 2012 and 2014 in Karlin.
If you had continued out of Prague 8 then eventually it becomes Prague 9. Not much in the way of accommodation out here (only the hotel Diana and Arlington are worth a mention for their restaurants). There are concentrations of apartment blocks from Ceskomoravska (O2 Arena) until Cerny Most. A couple of large shopping centres and Industrial zones have developed over the last few years.
Prague 10 has borders with Prague 2, Prague 3 and Prague 9 and is the last Prague area before entering the Prague-East district of the Stredocesky area. It has metro stations at Zelivskeho, Strasnice and Skalka. Highest concentration of residential blocks is around Strasnice and Zahradni Mesto (Garden Town - all the streets have names of flowers). Most of the accommodation is centered around Strasnice and the street/area called Vrsovice. Hotels in the Strasnice area are the Comfort Inn, Juno and Hotel Slavia. All are 3*. At Zelivskeho is the Dorint Novotel (formerly the Don Giovanni).