What? Can't read Czech? Don't worry. This ticket says (in English) that it's a Transfer Ticket good for 3 zones and 90 minutes (75 minutes during the work-week). It also says: "Any ticket which has not been validated is invalid." Pretty plain. At the bottom is the validation stamp. As you enter the station you will pass a set of ticket-validating machines. Slip your ticket into the machine as indicated by the big yellow arrow and it stamps it with the time and date you entered the system. If a transit inspector asks to see your ticket and you (a) don't have one, or (b) have an expired ticket you get to pay a monstrous fine (bang!) on the spot. The fine is large enough that the risk is simply not worth it. This ticket only cost 20Kč, about 80 cents US. The fine will be on the order of 12-15 US dollars. You will get caught often enough to make this a bad bet.
You can buy these tickets at newsstands and tobacco shops as well as at most train stations. They're too inexpensive to bother counterfeiting, but there are anti-counterfeiting measures built in anyway. This system eliminates the need for token-sellers at every station and a huge accounting system to tally up the receipts.