I've been living in Cabo San Lucas for some time now, and I can assure you that Mi Casa, Ediths, and the rest of the frequently-named restaurants referred to on this board are sure to disappoint (while breaking the bank, too).
It's hard, but not impossible, to find fantastic deals in Cabo.
For authentic mainland Mexican fare (albeit in a corporate-owned restaurant), La Fonda is a better bet than Mi Casa. Mi Casa is a far cry from authentic. La Fonda is fabulous. Try their sopes with chorizo and potatoes and any of their soups.
Avoid Pancho's. I keep reading recommendations for Pancho's. Aside from serving top notch margaritas (IF you pay for the good tequila), the food is pretty subpar. American-owned-- what more do you need to know?
Salvatore's (which will change location soon, this summer '08) is an excellent choice for homestyle American Italian. The only choice, actually. Go on Friday and have the lasagna. And be prepared to head to the ER afterward. It's not "authentic" Italian, it's authentic Italian-American. And the ambience is great. We'll miss it when it changes locations. The entrance is on a side street off Hidalgo inside the hotel (which you can see above the street) that's painted blue and pink. But its grounds are separate from the hotel. it leases its space. It's not stunning, it's just a bite of home (for an East Coaster like me).
For truly authentic Mexican, try any of the taco joints downtown (we like La Taquiza on Leona Vicario for their al pastor, or their next door neighbor's caldo de frijoles, 4 blocks up from the mall). There is also a tiny, bright green restaurant with palapa roof on a dirt road near the Cruz Roja in Cabo. (Enter the parking lot for the delegacion and community center. In fact, park there, and cross the street on the side of the lot away from the Todos Santos highway light. Hang a left on the tiny dirt road. It's the only restaurant there.) Serving unbelievably good, cheap, fresh mexican breakfasts and lunches. the chilaquiles here are unreal, as are the egg scrambles (all come with fresh regional cheese, frijoles, and fresh bread). No english menus, though.
For non-Mex dinner options, try La Bodega in San Jose. Steak and starters are delicious and well-priced (relatively speaking). USDA prime, perfectly cooked to your specs. Baja Brewing Co, a new restaurant, has so-so "upscale pub" fare, but great curly fries and good home-brewed beer -- for those of you tired of Pacifico, Corona, Modelo, et al.
For a truly outstanding mind-blowing meal, you absolutely must visit Los barriles on the East Cape (about 45 minutes north of San Jose). beautiful quaint little town. But the killer is the Italian restaurant, La Taberna di Don Roberto, on the waterfront in front of the new Van Wormer property, Villas de Cortez. (Next to the flagship hotel, Palmas de Cortez.) Dinner only, kitchen hours 5 to 10, closed Mondays. A real cheese course unlike any I've ever had in Baja, unbelievably educated wine selection, and ridiculously good (and well-priced) entrees and first plates, too. The pea soup was stunning, the beef tenderloin to die for, and the service, unbeatable. Let Fabrizio guide you or design a menu for you. You won't be sorry. The chefs are straight out of Parma (literally). This is "real" Italian. On a strip of beach best known for sport fishing. let's hope it can stay in business. (This couple also opened a pizzeria, which I've yet to try, with Naples pizza chefs.)
Avoid the marina restaurants. They stink, pretty much across the board, although Solomon's has decent grub.
I've got more, just ask. ;)
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