Bohemia Bagel is a great place. There are two locations, both of which offer exactly the same things, from the food to the interior design. One is in the Mala Strana, on Ujezd, and the other is in the Stare Mesto (Old Town) on Masna. It was opened by an American, as far as I remember, and this is definitely the place in Prague to go for a good bagel, coffee, or dessert.
They have a number of types of bagels that can be purchased individually at fairly cheap prices. In addition, there are a number of bagel sandwiches, most of which are truly delicious. I recommend that everyone that finds themselves in Prague immediately go to Bohemia Bagel and get themselves a Triple-Decker Turkey Club sandwich. This is, in my opinion, the best thing on their menu.
They offer bottomless cups of coffee and soda, and the coffee is a great option if you just want a regular cup of decent coffee, something I often couldn't find while in Prague.
The drawback, of course, is that it's a little more expensive than most places in Prague. If you get a soda or coffee (about 2 USD), a bagel sandwich, and a cookie, you'll be spending a little over 10 USD. Nevertheless, the price is worth it.
Another advantage of Bohemia Bagel is that it's equipped (at both locations) with computers hooked up to broadband internet. The prices are slightly higher than other internet cafes in Prague, but not by much (15 minutes for about 1 USD).
For more information, see their website.
Overall, a great place to have a quick and good lunch. The one in the Old Town even features a small outdoor area where you can eat outside, as well as separate smoking and non-smoking areas. They do, however, have a tendency to play strange techno remixes of five year-old songs.