I have spent a lot of time in the Czech Republic and travelled pretty extensively around it, and I don't think I saw anywhere as beautiful as Cesky Krumlov.
There are quite a few tourists going around in groups during the day, but it is manageable. I would recommend staying at least a night and relaxing with a few glasses of beer whilst the day trippers rush by. Then head out for some exploring when it has quietened down a little, and then finding another pub.
We rented canoes and paddled through the centre and carried on a few hours down stream. This was a great way to view the centre of the town, especially the brightly coloured castle.
Cesky Krumlov is a real gem and a highlight of central Europe. It is well worth of a trip down from Prague for a couple of days to recover from the crowds.