The prototype model involves building a throwaway prototype early in the development process to help understand requirements rather than freezing them upfront. This allows clients to get hands-on experience with the system and provide better feedback. Prototypes are incomplete but provide overall functionality. The prototype model is best for complex systems where requirements are unclear and user interaction and feedback is important, such as web and online systems. It enables errors and missing requirements to be identified early. However, it risks requirements changing too much and the system becoming more complex than originally intended.