If you do not mind spending the money, I can suggest Restaurace U Supa, quite near the Old Town Square. It is just one of many traditional restaurants in the old town of Prague. It has a great outside cafe area right on the pedestrian street Celetna, and on a warm day, you can watch the people walk by and take in the old buildings around you. Here was the view from my table.
The menu offers a variety of food, with a large section of traditional Czech dishes, as well as pasta dishes and great appetizers for beer drinking :)I ordered a Caprese Salad and a Pilsner Urquell (the main beer brewed in the Czech Republic - it is like Guinness to the Irish), and had quite a nice lunch, but be prepared to spend about $15-$25 per person.
Keep in mind that there are cheaper places to go for lunch, such as Paneria, where you can get many different kinds of baguettes, paninis, salads, etc. for a very good price. A meal will cost you about 150-200 Czech Crowns (less than $10).
Happy Eating!
-Tasha
