Berlin is probably the cheapest capital of any developed country in the world. Note though that in the touristy areas, prices tend to be skyrocketting (for example in restaurants in the main boulevard "Unter den Linden"). A few metro stations further off, eating, drinking and partying is pretty cheap.
Germans are really honest. As far as I have noticed, they mostly do not try to cheat you. But of course it is possible everywhere. May be you can check out the prices more carefully because of the euro/DM exchange.
Some museums are terribly overpriced. Haus am Checkpoint Charly and the Fernsehnturm both charge 10 DM. Unless you really really want to visit these, visit one of the many reasonably priced (like the ones on Museuminsel or inside Schloss Charlottenburg) or even free (like the Infobox) museums instead. You can get a view of Berlin from the Siegesäule for only 2 DM (1 if you're a student).