Thanks for all the SMA recs. As one poster noted, the restaurants are mediocre. In general, the smaller places that cater to the locals are better than the tourist places. Our favorite steak place was Ole Ole on Lareto near the mercado. Great steak. We also went to 69 mesones, as recommended, and it was fun. You pay for the buriquesos (or buritacos), go the counter and point at your preferred fillings. We also liked a no-name hole in the wall at 89 mesones, it is open after 8 pm and is the entrance to a disco, with only 4 tables. The tortillas are ultra fresh and the gringas are grilled with no oil, so they are very fresh. Afterwards, go to Petit Four down the street for a great raspberry tart. The one tourist place we liked was la parroquia on Jesus street - it has both mexican and gringo dishes and a very pleasant atmosphere. Or, to save money, go to Pinata just up the street for good queso fundido with mushrooms and decent quesidillas, steak, and soup. On San Francisco, try Augustin for hot chocolate (Spanish, not Mexican) and churros. Neither of my kids liked the hot chocolate - it is a grownup version. On the corner of Hidalgo and Insurgentes is a small park that serves great freshly squeezed fruit juice. Finally, I never got there - but a local highly recommended Apollo for carnitas - I think it is near the library.
To avoid: Bueno cafe (both the mexican and american dishes were terrible, tho the dessert was good), Pueblo Viajo, and Don Tomas (I had high hopes for this one, and the yellow mole was OK, but everything else was mediocre).