Yes, but it's not like the US. Rounding up the bill to the nearest 10 or 20 CZK or leaving a 5-10% tip is standard and appreciated.

Should I pay in Euros?

No. Always pay in Czech Koruna (CZK). Paying in Euros at restaurants will result in a terrible exchange rate set by the merchant.

Jak se v Praze najíst jako místní za pár korun

Avoid the tourist traps in the Old Town Square by eating at neighborhood 'jídelna' (canteens) or pubs serving a 'polední menu' (lunch menu) between 11:00 AM and 2:00 PM. You can get a hearty, authentic Czech meal for under 200 CZK if you stick to spots away from the main historic thoroughfares.

Target the lunch menus. Look for signs that say 'Polední menu'. These are fixed-price weekday deals offered by local pubs. You will get a soup and a main course for roughly 160–190 CZK. They are written in Czech on a chalkboard outside; if it's only in English, keep walking.
Use neighborhood 'jídelna'. Find a local canteen-style restaurant. These are cafeteria setups where you grab a tray, point at the food, and pay at the end. They are the backbone of local lunch culture. Expect simple, heavy, classic food like goulash or svíčková.
Skip the 'Trdelník'. The chimney cakes sold on every street corner are not traditional Czech pastries; they are a tourist invention. If you want a sweet treat, go to a local 'cukrárna' (patisserie) and order a 'větrník' or a 'koláč'.
Drink local beer. Beer is often cheaper than bottled water in Prague. Order a 'pivo' (half-liter/půllitr) of a local brand like Kozel, Plzeň, or Gambrinus. It will set you back about 50–70 CZK in a standard pub.

Is tipping expected?: Yes, but it's not like the US. Rounding up the bill to the nearest 10 or 20 CZK or leaving a 5-10% tip is standard and appreciated.
Should I pay in Euros?: No. Always pay in Czech Koruna (CZK). Paying in Euros at restaurants will result in a terrible exchange rate set by the merchant.