You can eat at any of these places for about 20€, as long as you don't have fish and stick to the house wine or a beer. The restaurants along the harbor serve mediocre food to the tourists arriving from and departing for Italy. If you are pressed for time, try To Konaki, across from the station; it serves good food. (Unfortunately, for most of the summer, To Konaki moves shop to the beach at Rio.) If you want an ouzo before dinner or a dessert afterward, head for the cafes on the main square, Plateia Yioryiou.
There are several old-fashioned tavernas along Ayiou Nikolaou, including the Majestic and Nikolaras. If you visit the kastro, you might have a meal at Krini, 57 Pandokratoros, which is usually open for lunch and dinner, has its own garden, and is popular with locals and Greek tourists; a simple lunch or dinner from 15€. If you want a leisurely and excellent meal in town, try Mythos, 181 Riga Ferrou Trion Navarchiou and (tel. 2610/329-984); in addition to the usual stews and grills, Mythos usually has local specialties on the menu.
One place I think of fondly is Trikoyia, 46 Otho and Amalias (no phone), a hole-in-the-wall taverna that serves excellent fresh fish and octopus. Chops and one or two other meat dishes are usually available as well. It's a 15-minute walk along the harbor from the main port; fish is priced by the kilo.
Next door at 48 Otho and Amalias (no street number) is Pharos Fish Taverna (tel. 2610/336-500). There are usually lots of locals here -- always a good sign. Head inside first and choose your fish; if you arrive and sit at a table, the waiter will probably ignore you, thinking that you're waiting for friends. If these places are too crowded, you'll find lots of other tavernas on the harborfront, including Dinos at 102 Otho and Amalias and Apameno a few doors along at 107; as always, fish is priced by the kilo.
Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.