I took the minimal approach with my prompt. Under normal circumstances, my prompt looks like this:

  ~$

I only show the username and hostname in my prompt if remote or unusual: [ -n "$SSH_CONNECTION" ] || [ "$USER" != "josh" ]. If either of those, I prefix my prompt with "user@host:". Apart from that, I show the exit status of the last command run, if non-zero. In general, I try to hide all boring information and show useful information only.