Just back from Oaxaca. Did not get many good food tips from CH before going (we didn't leave much lead-time) so thought we'd offer up ours (brief, write for more info). In Oaxaca city: El Topil was excellent, though stingy w/tortillas. Sopa de negritos super-yummy. Casa de Abuela: not great. Pretty setting, absolutely awful soup. OK mole,GREAT margaritas! AVOID "La Rana Feliz". Best coffee (without a "let's pretend we're in San Francisco" atmosphere): Cafe Antigua. Did not get a chance to try Flor de Oaxaca, El Biche Pobre or El Naranjo so can't comment. Had planned a last night at Fonda de la Cruz but found it closed on Sat night (after they said they'd be open). Bummer.
Outside the city: "Centeotl" at Yagul was wonderful - get "sopa de guias" or the chile rellenos (stuffed w/nuts & fruit, perfect & not heavy). "Tlamanalli" is in Teotitlan del Valle & also wonderful. Beautiful service, "house-made" mescal, "coloradito" mole superb.
Oh, anyone out there know if "YuNeNisa" in the city is open? Cooking course by Susana Trilling (Seasons of my Heart) very good. Have fun.