The cab drivers in Prague really are that bad. The problem has gotten slightly better after the Prague mayor dressed up as an Italian tourist and saw for himself how much they rip off foreigners. But it is still not nearly good enough.
The thing is, they don’t only overcharge foreigners. It occasionally happens to locals, too, if they don’t pay attention to the hyperactive meters. Sadly, a lot of them prefer making an extra $10 today than get return customers tomorrow.
It is necessary to stress here, however, that this ONLY happens with cabs you hail on the street. If you call (or have your hotel/restaurant call) one of the established taxi services, such as AAA or City Taxi it will not happen.
The official airport taxis all charge the same, about $25-30. There is also a bus that takes you right to the subway for less than a $1. Public transportation is definitely the way to travel in Prague.