I have a 2001 Prius, with disc brakes both rear and front. It smells of burning brake pad and the wheel gets hot. I've tried braking hard, and that sometimes makes the problem go away for a while. First time it happened was this summer, and then it reappeared in September. I don't drive much during the winter, once or twice a week, 10-20 miles or so. When I had the car in for service last October, the rear brake pads were replaced, and they had some problems removing the old pads. I assume that the brakes need to replaced. Is this a 500 dollar repair, or a 1000 dollar one? Do Priuses have more problems with this, because of the regeneration brakes?
Last spring I had a similar problem with my brakes. Because the roads were heavily salted in winter, the brakes were corroding, and the pads were not moving freely, continuing to press against the discs after braking. In my case, they didn't press so hard, so I first noticed when one of the front pads started squealing because it was completely worn out. To be on the safe side, I had the front pads and front discs replaced, and the sliding surfaces cleaned, derusted and lubed, for 270 euros at the Toyota dealer. Afterwards I also closely examined the rear brakes, and found that they were also not sliding freely. Since they were not severely worn or damaged, I had the Toyota dealer service them without replacing any parts. Disassembly, a little grinding, cleaning, derusting, and relubing of the rear brakes cost me 120 euros. I now plan to examine the brakes very carefully after every winter. Based on my experience, I suggest that you do not replace brake parts that are not damaged or completely worn out, because new parts are not likely to last longer before dirt and corrosion begin to make them stick.