Please help me sort through the confusion of getting to Prague from Germany

You mean the closest train station to YOU is Parsberg, not the closest station to Prague. You can always go to Nürnberg, less than an hour away, and take the Bahn bus from Nürnberg to Prague. The bus trip takes just over 3½ hrs from Nürnberg. If you book well in advance (as far as 92 days) on the German Rail website, you can get a non-refundable Europa-Spezial ticket for that trip for €24 pP. There is also a train leaving Parsberg at 5:45, connecting in Regensburg at 6:17 to a train with one change in Schwandorf, arriving in Praque at 10:54. If you buy a Bayern-Böhmen ticket for €23 in Parsberg, it will cover her travel from there to Pilsen. A Czech Rail ticket from Pilsen to Prague for ~€6 will cover her to Prague.

If you possibly can avoid driving to and in Prague. Traffic jams, aggressive drivers, one way streets etc. Take train or bus from Nurnberg. Prague has a very good public transport. There are many more than 3 tram lines. There are 3 Metro (subway) lines. The last time I was in Prague (1 month ago) 24 hour pass for public transport cost 100 czk.

I took a leap of faith and booked a room at a hotel in Old Town near the Charles bridge. I am going to go to the train station this week and buy the train tickets - I considered driving but our car is a 2011 and I would miss it if it were to be taken - we really need to hold on to our reliable transportation in these German Alps! I like this plan you layed out Lee: Train leaving Parsberg at 5:45, connecting in Regensburg at 6:17 to a train with one change in Schwandorf, arriving in Praque at 10:54. The other scenerio you listed - is it an actual bus?: Take the Bahn bus from Nürnberg to Prague. The bus trip takes just over 3½ hrs from Nürnberg. Is this one a 3rd option?:
If you buy a Bayern-Böhmen ticket for €23 in Parsberg, it will cover her travel from there to Pilsen. A Czech Rail ticket from Pilsen to Prague for ~€6 will cover her to Prague. Thank you again! I feel closer to being mentally ready to go! :o)

It is an actual bus from Nuremberg to Prague. It is a very nice express bus that runs maybe six times a day. It is a very easy, pleasant trip. We used it about a month ago.

This is the Bahn page about the bus, http://www.bahn.de/p/view/angebot/international/zuege/prag-bus.shtml. It leaves from right outside the main exit from Nürnberg Hbf. The bus ticket is available for that price 3-92 days in advance, online from the Bahn. I don't think you can even get that price it at a counter (advance purchase would still be required), but if so, there is an additional charge for personal service. From your original post, I assumed she was going alone. If you are going, too, a full (2-5 P) Bayern-Bömen ticket, for €33, will cover both of you on the train. You will still both need a ticket from Czech Rail for Pilsen to Prague for about €6 each. The Bayern-Böhmen Ticket will always be available on the day of travel (or for a specified day in the future) at ticket automats. Get the Pilsen to Prague ticket in the CR (on the train from the conductor or at the station in Pilsen). German Rail tickets for the same trip are more expensive. If she is coming back, get the B-B-Ticket in advance in Parsberg. I don't know if they are available in the CR.

We took that bus on Dec.19th because all flights from Frankfurt to Prague were cancelled due to snowstorm. Obviously we did not have a reservation and bought the ticket from driver (or helper). The price per person was 51 Euro. It's much cheaper if you can buy ahead. It's a nice double decker bus, the first class is downstairs and second class upstairs. It has a bathroom. You can buy food and beverage on board. Despite of heavy snowing bus arrived to Prague on time.

Patty, Since you are so close to Regensburg, I myself would do it this way: take the train from Parsberg (had to look that place up on my railroad map ) to Regensburg, then wait for the direct train Regensburg to Prague. There's a direct train after ten o'clock. That way you avoid transfering, especially with luggage. Does it matter if you get to Prague 3 hours later ie., a bit after 1400 than closer to 1100? Given a choice I prefer the train over a bus, even though my experiences with buses in Germany, Poland from town to town have been satisfactory. You asked "what is the most direct way, by train, of getting to Prague?" From Dresden, ca. 2hrs direct, but that's not feasible for you at the moment. So, from Regensburg direct is your best option, unless you are pressed for time.

Fred, she said she wants to arrive in the morning. The 10:31 train does not get to Prague in the morning. It is a possibility, and at a more reasonable time, but doesn't get there in the morning. The ten minute change in Schwandorf is a non-issue.