Just got back from a trip to Monterey, and I'm listing a few places that we dined at:
Old Monterey Cafe (www.montereycafe.com)
Seems pretty popular in the mornings for breakfast. Don't know if they were fellow tourists or if it's really a local's place. A decent breakfast menu, and a nice bowl of salsa at each table. What I've seen on previous visits seems like fresh minced salsa, but this time it looked like the jarred kind. We had oatmeal with a decent amount of topping that you can apply, brown sugar, bananas/blueberries, and cream. Also the artichoke omelete and a nice marble rye bread (with too much butter)
Phil's Fish Market (http://www.philsfishmarket.com)
I don't know how people find this place if by accident, it's situated in the middle of some seriously industialized area. We only had the clam chowder which wasn't bad. There was a 2lb serving of mussels for $13 which seems like a bargan, but we couldn't fit it anywhere.
India's Clay Oven
We had the various fritters with the minced mint and tamarind (tasted like worchershire) dipping sauces. Also a really good lamb stew. To go with it, a very pungent garlic naan. For dessert, we were sold on the "saffron kulfi with mango", but when served looked a lot like a frozen mango. It was good, but we were looking forward to the saffron.
This visit was based on some of the things said on this board. We had the rack of lamb, which is supposed to be a specialty, but I found it rather diappointing. Probably only because I was expecting more. The eye was seperated from the ribs at the kitchen, which made eating the ribs themselves slim pickings. But the meat themselves was tasty and cooked just right. We also had the Fandago Paella, with mussels, chicken, clams, shrimp, and chewy squid. This was better of the two dishes. Although I asked for the smaller room, I found it cramped and confining. I found myself easily listening in on the next table's conversation.
Also a Chowhound rec. Looks like a converted 50's coffeeshop, but they have some wonderful seafood here. We started off with a very satisfyingly hot clam chowder, dotted with a tomato salsa. I believe I found some string beans in it. We also had the daily fish which was the grilled salmon topped with a undetermined orange sauce. A bit fishy, but good. Also was a very delicious cornmeal crusted shrimp po' boy.