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Here is an overview and some advice after 35 days in KW. Drink and people watch on Duval Street; most of the restaurants on the northern end of Duval are not to par with other establishments in Key West dining scene.
Breakfast: Pepe's on Caroline, Harpoon Harry's on Caroline, Sandy's Cafe on White ( no table service) or Paradise Cafe on Grinnell. Sandy's and Paradise , very casual and less $ . Sarabeth's has a great breakfast/ brunch and lunch 6 days, closed all day Tuesday.
Check out this page for a few more breakfast suggestions.
Lunch: Great fresh , deli style sandwiches/ soups and delivery and reasonable for size at Paradise Cafe, try the monster size and split as well as Sandy's Cafe on White. Lobo's in Key Lime Square off Southard / Duval (hidden) behind Mexican Cafe, in a courtyard is superb! great fresh wraps. Jerry is the owner and can advise as well on other local dining spots, large portions, clean, shady eating, they deliver as well.
Pepe's on Caroline has a great fish sandwich , as well as B.O's across the street for about the same $. B.O.'s is a funky looking place , it can get really busy and no table service . Alonzo's Oyster Bar on waterfront has a great view and a good lobster salad with higher prices for the view and people watching. El Sibonney on Catherine below Truman ( in a neighborhood) is a gem for Cuban food, great food and reasonable prices. Caroline's on Duval has good "Duval" lunch/dinner food, fair prices, and superb people watching as well .
Dinner: Many choices , depending on mood and budget.
Pepe's has a casual dinner as well as all the above sandwich/deli spots if eating "light" or going out late. Sarabeth's on Simonton / Southard has a superb dinner menu , try the fried chicken, (really) on Sunday night , a KW special as well as diver scallops, fun outdoor spot. Azur on Grinnell has superb food, outside dining option and nightly specials, an upscale spot. Blue Heaven has great food, 21 meals a week! dinner is especially nice dining outside,, yellow tail snapper special is superb. Santiago's Bodega on Petronia has superb tapas, fun to share , a fun vibe as well here , must have a reservation in season, off Duval a few blocks, worth the walk. Roof Top Cafe is now open again after fire in 2008, the food was good but service had declined , last vist in March 2009. Martins, 915, Salute, and Seven Fish all are good. Call ahead for reservations for all these places to avoid lines and bad tables, the Menu Dining Guide, free, is a good place to check menu's out , prices and exact location's. There is a newer steak place, 951 Caroline on waterfront near Dante's , Square Grouper, MM 22.5 has great food about a 25 mile ride north of town in a red roof , industrial looking building, really top notch food, looks can be deceiving. .
Bar Scene: Many Choices
Turtle Kraals , at the waterfront , as well as the famous Schooner Wharf Bar has an upstairs deck that is usually never crowded, great sunset views , a fun spot and a good happy hour, Jerry is the bartender at Turtle. Hog's Breath is a KW favorite , live daily music from noon on, Capt. Tony's has a superb house band Wednesday- Sunday, lots of old rock, grab a table , dance and drink. Green Parrot is a local favorite as well and good live music, less college age kids at all these places. Sloppy Joe's has more college kids. Never far from a beer or drink, look and find, good bars on/off and near Duval as well as Sunset Pier, Zero Duval, great view for a sunset, a tourist spot, but who cares as well as Pier House Hotel across the street has a nice water front bar/ small beach . Louie's Backyard on the Atlantic side has a great bar , Atlantic oceanfront views.
Fausto's Food Market on Fleming , if in the cook/ eat -in- mood has good steaks, burger and salads, as well as seafood. Eaton Street Seafood , great local KW seafood, open 6 days, great selections and always fresh. Rusty Anchor Restaurant and Seafood Market on Stock Island has a nice lunch /dinner, far less $, no water views , but great food as well as a premier quality seafood market behind the restaurant, mainly a wholesale place, but sells to public. Hogfish Bar/Grill, also on Stock Island, great lunch spot, water views and some interesting folks/locals around, take the kids, but not at night. Assortment on Fleming Street is a 5 STAR men's clothing store, unique, not rack stuff like at your local department store, great shoes, ties, sport coats, belts and shirts!