How can I decide on initial values to be used when fitting a user-defined equation?

In many cases, once you understand the meaning of the parameters, determining an initial value is obvious. Otherwise, spend some time simulating curves.

Prism 4
Read the section "Trying out Initial Values" in this step-by-step example.

Prism 3
You can use the nonlinear regression analysis, but check "Don't fit. Fix all variables to their initial values." on the initial values subdialog. Prism will just show you the curve generated from your estimates. Then go back and change the estimate and see how it affects the graph. Once you get a feel for how the parameters change the shape of the curve, you'll be able to come up with values that bring the curve near your points.