Munich is a great city. Didn't go during Oktoberfest, but still had fun. One piece of advice I heard for avoiding long lines to get into the tents is to wear lederhosen. I remember seeing a lederhosen store not too far from the Glockenspiel in Marienplatz, but it was closed when I went by (it would probably be equivalent to going to Lammle's during Stampede).
In Central Munich, they have the English Gardens, which is the largest urban park in Europe (including a nudist area - unfortunately, mostly nude guys). It's a beautiful park (and in true Bavarian fashion, even has a large beer garden).
Munich is also the home of BMW, and they have a big BMW museum. I didn't go, so I can't comment on its content.
A short way outside of Munich is the Dachau Concentration Camp. A pretty sombre place, it was the first Concentration Camp that Hitler set up after taking power. It is not a thrilling place to go, but you won't soon forget it.
On a lighter note, you can go to one of the best castles in all the world. Mad King Ludwig's dream castle, Neuschwanstein, is a couple of hours south of Munich (by bus or train), nestled in the Alps. It's the classic fairy tale castle that the castle at Disneyland was based upon. It's a really cool place to visit.
We did a bike tour around Munich, and saw most of the major sights in a couple of hours. The company is called Mike's Bikes:
http://www.mikesbiketours.com and it was a good time (but not the nicest bikes you've ever seen). Their office was close to the Hofbrauhaus beer hall. I don't know if the beer halls are very active during Oktoberfest, but they are a fun experience.
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Prague is a gorgeous city, and dirt cheap, especially if you go off the beaten tourist path. We went to a small store close to our hotel, and I got a 1.5L bottle of water and an Aero bar (because I had to know what a Czech Aero bar tasted like -- answer: it tastes like cheap Eastern European chocolate) for 11 Crowns total (about 50 cents).
Beer at the Hotel bar (always an expensive proposition) was 40 Crowns (about $2 CDN) for a pint. At the bar we went to, it was 25 Crowns. Also, Czech beer is probably the best in the world (even better than Germany).
You have to go to Hradcany (Prague Castle & St. Vitas Cathedral), which overlooks the city, giving you an amazing view of one of the most beautiful cities in the world.
There are a lot of beautiful women in Prague. Unfortunately, I found the people to generally not be as friendly or welcoming of tourists as the rest of Europe, and English isn't very widely spoken, especially among the older generation. I assume this is a hold-over from 30 years of Communist rule.
Also, try to avoid any encounters with the Czech Police. They're really not friendly, and they don't even attempt to speak English -- not that I have personal experience or anything
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Prague was also the only place on my trip where I saw hockey on the tv (in Czech, and not NHL, but still it was hockey). I watched a period of a game between a Swedish team and a Russian team, and the only words I understood were "Alexander Ovechkin", "Phoenix Coyotes", and "Toronto Maple Leafs".