Psion: to Answer the below question(s) - let me apologize in advance for my stream-of-consciousness typeos.
I have yet to see this happen in any game I have run. I have one PrC character in my current longterm campaign (now at 18th level).
How so? I'm just not seeing it for any reasonably designed prestige class.
The shadow dancer allows one to hide in plain sight if there are shadows as a move-equivalent action. Sneak attack, every attack. With haste, I can get off a full attack! See invisibility, True seeing, or other spells do not help locate the hider. Blindsight or tremorsense can help. But the point is: Sneak attack
all the time is a problem.
Dwarven Defenders damage reduction, strong will save, AC bonus and uncanny dodge made fighters or paladins pretty ugly.
Consider: You can have a Dwarf Fighter who has a better will save than a straight wizard, AND a fighter BAB, AND bonus abilities - and for the PrC's level's 1-6 the abilities come pretty fast.
The other broken ones I have seen played: Holy Liberator, Hospalitier, Arcane Trickster, Alieniest (Player took only two levels of Alienist), and The "hated enemy" PC from Ranger, Druid, Barbarian splat book.
By themselves, with proper introduction into the world, and careful restriction of the applicant's who wish to attain the class, PrC can add value to the game.
Letting characters add them because they fufill the pre-reqs often can disturb the balance of player to player effectiveness.
Hmmmm..I will qualify my stance on PrCs. If you start from L1, and make the feat/skill sacrifices needed to accomplish some PrCs (like Dwarven Defender), then at least there was some Risk vs. Reward. When you have players generate new characters at higher levels (becasue you think it is unfair for a new character to come in at L1 with a 6 level party), the improbable feat chains and skills really leave a abd taste in your mouth.