Okay, here's my short list:
Phil's BBQ - THE BEST, always a line! Not to pricey
Corvette Diner - 50's style, cute, good burgers, free entertainment, be prepared to have things tossed at you (straws, bubblegum, etc)
Hodad's - surfer vibe, Great food and prices
Sipz - vegetarian, ok prices, creative food - NO meat
St. Tropez - great for breakfast & lunch, best pastries
Rei Do Gado - pricey, all you can eat, LOTS & LOTS of meat, but very good
Not on the list
Nicky Rotten's (won best SD bar), Great burgers
Dick's Last Resort - great drinks, interesting atmosphere, good for getting a little wild (at least on the weekends)