Can prepaid phones be tapped

tapped, yes....Traced, yes depending on the phone.

Cellular Taps are actually easier to conduct as its all digital data going through a computer system as opposed to the sound signal system of wired phones.

Traced... this is where it gets tricky. A cell tower cant pinpoint a phone accessing it to the meter. but it does give a relatively accurate location based on factors of signal strength, ping times (distance from tower), and which pallet is being accessed (direction from tower). Usually within a 100 yard area... More modern phones and indeed EVERY smartphone I know of has more advanced systems for tracking such as 3G "Relaytimes" which is very accurate and usually within 50 yards. and GPS which depending on the transmitter in the phone can be accurate to feet in distance.

As far as how you pay... if you use cash it would require some doing to trace a specific phone to being your phone. The ability to trace the phone or tap it doesn't require your method of payment.. that's just what would be needed to link the phone to its user. But believe me.. The only reasons I can think someone would ask this...

1: Don't kidnap people. They will still catch you.

2: Don't cheat on your significant other. They too will still catch you.

3: Don't prank call, the prepaid company will get complaints and kill your number at your cost and you will lose all your paid for minutes.