I didn't backpack around Europe (went on an school thing then with the family) but I cannot recommend Prague enough. Absolutely loved that city. If you want to go to a cheaper but still really really nice country, go to Slovakia. The countryside is just beautiful, and lots of cool stuff to see there. Hotels that would cost upwards of 500 bucks a night were maybe 100 in Topolcany. Poprad and Bratislava were a little more expensive but not as bad as everywhere else I went.
Croatia was really nice as well but portions of it could be very expensive (especially in the harbour areas). If you go to Croatia, make sure you take the time to go to Splivice Lakes. They are absolutely incredible. Every lake is just like this...
