Question: I cannot see any difference between these two sentences. I assume both express the same but what is the difference? I thought that "used to" is used to describe an action that was happening in the past...but should "live" be considered as an action?

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> I used to live in Prague 5 years ago.  
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>  I lived in Prague 5 years ago.
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Answer: 
*Used to* refers to a state or habit in the past, whereas the past tense describes an event at a particular time in the past. That means that the first sentence would be unlikely because a state or habit cannot normally have such a specific time reference. *I used to live in Prague* on its own is fine, but if you wanted to specify when you lived there, then the second sentence is what you’d use.
Strictly speaking, both are correct, and both mean the same thing, but I think that "I used to live in Prague 5 years ago" is slightly awkward; for a verb like "live", the "5 years ago" makes the "used to" unnecessary.

Without the "5 years ago", or other contextual indication of time, "used to" would definitely be better: "I used to live in Prague", not just "I lived in Prague".