Well they're not in downtown Toronto, rather in Scarborough...but Ted's Restaurant in West Hill and the Wexford Diner have pretty much their original decor, for better or worse!
I'm enjoying this thread so much (have taken notes, thank you all) I decided to join Chowhound. Greetings!
Once upon a time I lived in the States and agree American-style diners are a special treat--we're always on the lookout for interesting ones when we're down there. That said, in the Toronto area we like Amazing Ted's in Highland Creek (east Scarborough) for their generous, inexpensive breakfast and friendly fast service; we've enjoyed everything else we've eaten there, too. Sadly Donuts and Diner on Ellesmere near Birchmount, another Scarborough favourite, seems to have closed. I'd be happy to be wrong about that. By the Bluffs on Kingston Road serves good home-cooked style food in a "Down East" (Maritimes, not East Toronto) atmosphere. Their crabmeat sandwich is delicious.