Interestingly people seem to only recommend places that have been around forever, regardless of how things developed over time. Both L'uva and Chesters, as great as they were, are not around any longer. On the other hand some of the old standbys have seriously deterioriated. I think it is about time to suggest some newer establishments, that have been doing a really nice job. I suggest: 1) Jimmy's for drinks 2) Devon's for breakfast 3) Patio for cocktails and seafood 4) Edwige for elegant food 5) Purple feather for ice cream All these establishments are great.
I am in P-town every weekend as I have a home here and have a different take on some suggestions. Typically tourists and locals do not necessarily frequent the same places. I would definitely recommend Patio as the best place for delicious food and great drinks and certainly people watching. For breakfast definitely check out Devons and for a special night out go to Edwige at Night.