To market, to market
Just as the day after Thanksgiving is the biggest shopping day of the year in the U.S., that day is also important in Prague, as it marks the opening of the city's quaint and magical Christmas markets. Drink hot mulled wine (svarak, pronounced "svah-zek") or hot mead, and be merry, not cold, as you browse the locally handcrafted and handcarved goods on offer at row after row of gingerbread house type stalls. These Christmas tree-encircled markets are perfect places to find that special Christmas present or souvenir, but take a good look around the entire market at least once and then go back to get what you want, because in the larger, more sprawling markets such as on Old Town Square, you will come across a couple stalls selling the exact same souvenir item, but for different prices!
Even if you are fed up of the hunt for the perfect souvenir, then the markets are still a great place to soak up (and drink up) the local spirit of the holidays, as the citizens of Prague detour from their daily grind just for this moment, just this once, to listen to the free bands on the outdoor stage, enjoy a slice of the spit-roasted Prague ham, or a nice fat grilled sausage and slab of brown bread with a jalapeno or onion on the side, or to indulge in an inexpensive, walnut-filled or warm and sugar-sprinkled pastry.
Christmas markets are located right at or nearby the major central metro stations: Old Town Square (5 min walk from Staromestska metro), Wencelas Square, Namesti Republiky, Namesti Miru and Andel (this one is probably the least touristy and the svarek is actually 15 Kc cheaper!).
And a last note of caution: when browsing during especially busy times at the markets, please be sure to keep your wallets and valuables safe and close to your person--there are usually security persons standing about, but markets filled with tipsy and distracted tourists are prime spots for pickpockets.