We spent a few days around Georgetown, some notes:
If you want to eat at Kabaya book ahead of time, they were a bit standoffish (we walked in to make a reservation and asked us to call instead) and it wasn't worth the effort for us. Pretty formal space. Curious if anyone's been!
China House, 153 Lebuh Pantai - Huge slices of cake if you are feeling indulgent - lots of different types with good quality ingredients. Popular with locals and tourists. Huge space. Service is harried - expect to park here for awhile and there can be a long wait for a table (ask where to put your name down). Pretty good cocktails and coffee as well.
Hameediyah, 164 Lebuh Campbell - Famous for murtabak and nasi kandar. We had the murtabak and it + teh tahrik was solid. They have two storefronts and ordering is a bit confusing. An alternative nasi kandar place we didn't get to try was Kassim Mustafa.
I Eat Restoran, 110-1-21, Summerton Commercial, Persiaran Bayan Indah (outside Georgetown but if you happen to be in the area it's close to the Beer Factory). Good Nyonya food esp. liked the assam fish, otak-otak, and sambal petai with prawns.
Jawi House ,85 Armenian Street - Limited menu of very interesting Malaysian food from the Jawi community. Really enjoyed the Beef Rendang and special rices. Consider making a same day reservation.
Mish Mash, 24, Jalan Muntri, George Town, - OK cocktails, fun space, some nice bites of food such as pork belly, chicken wings etc.
My Own Cafe, 2 Cannon Street - Assam Laksa. Solid rendition probably not the best in Penang a little bit one note on the sour flavor, but in a very convenient location.
Ruins of Victoria (next to China House) - New bar and restaurant with a fun space. We went only for drinks. Cocktails were a bit too sweet.
Tek Sen, 18, Lebuh Carnarvon - Excellent and tasty chinese stir fry and other dishes, pretty unique well run, often a line. Popular with tourists and locals.
Veloo Vilas, 22 Penang Street - The banana leaf lunch is excellent and spicy. Comes with rice, papadam, pickle, a vegetable curry, and your choice of curries/toppings to the rice (sambar, fish curry etc.). If you want more, you can add orders of other dishes - they have excellent meat/seafood dishes esp. their pepper chicken. Limited tables, but there's a decently fast turnover.