A creature doesn't know if it's affected by spell unless the spell says so; likewise, a creature doesn't know how a spell is affecting it unless the spell says so
A creature can identify the spell prayer as the spell's being cast with a Spellcraft skill check (DC 18), and, if a creature also has a way to sense the spell prayer in the first place (e.g. the creature uses the spell detect magic), a creature can identify the spell prayer after the spell's in place with a Knowledge (arcana) skill check (DC 23).1
However, lacking explicit text that says otherwise, creatures targeted by a spell don't know they've been targeted by a spell, nor do affected creatures know they're affected by a spell.
If that seems a bit unfair, it is, but, also, most of the time it won't matter. If a target knows it's been targeted or if an affected knows it's affected, that's fine because the target or the affected isn't likely long for this world anyway. However, in a campaign comprised of backstabbing PCs, playing from the beginning that many spells have no obvious effect at all is probably a good idea.
The GM can implement setting-dependent rules governing casting a spell or a spell's effects
It's not like the spell is astral projection or anything, so here's the whole thing:
School enchantment (compulsion) [mind-affecting]; Level cleric 3, paladin 3
Casting Time 1 standard action
Components V, S, DF
Range 40 ft.
Area all allies and foes within a 40-ft.-radius burst centered on you
Duration 1 round/level
Saving Throw none; Spell Resistance yes
You bring special favor upon yourself and your allies while bringing disfavor to your enemies. You and each of your allies gain a +1 luck bonus on attack rolls, weapon damage rolls, saves, and skill checks, while each of your foes takes a –1 penalty on such rolls.
Thus, without further information, if the GM says that the spell's somatic components include giving each ally a thumbs up and each opponent a thumbs down, then it'll be obvious to all what the caster's doing, but if the GM says a caster has a little heads-up display in which all of the various allies, enemies, and, perhaps, other participants appear and the caster mentally ticks off who is in each category...
Character Ally Enemy
Abel the Wizard X —
Bob the Fighter X —
Orcs 1 through 59 — X
Orc 60 X —
Orcs 61-87 — X
Orc Warlord — X
Restov the Nightblade X —
That Dude over There — —
(Only the caster would see this.)
...then there's no way for those affected to know, short of the obvious: trial and error, an effect like the spell detect magic, and so on.
A DM could also say, for example, that targeted creatures briefly have yellow exclamation marks above their heads (or equivalent masses) or that affected creatures give off non-illuminating glows (e.g. red for enemies and blue for allies), but this is well beyond many spells' typical descriptions. A GM who deliberately adds such indicators is giving away many spells' targets and, possibly, their effects, but that might be exactly what such a GM desires.2
1 There's also the hostile tingle that a creature feels when it succeeds on a saving throw versus a targeted spell (which the spell prayer is not). More information on detecting targeted spells is covered in this related question.
2 In an Advanced Dungeons and Dragons, Second Edition game in which I played a wizard, the DM house ruled that the spell teleport emitted a loud pop both upon departure and arrival, making teleport ambushes not impossible but more difficult. Without a cleric in the party to cast silence, 15-ft. radius beforehand, we were limited in the usability of teleport to murder our foes. I didn't mind; back then, the spell teleport was a lot more dangerous to the caster, having the possibility of killing the caster outright.