In Lexington, VA area you won't find a great number of restaurants, and the fare for dinner is somewhat inconsistent, but here are a few suggestions:
Bistro on Main, 8 North Main St., is our consistent favorite. The space is contemporary, intimate, and lively (especially during the school year). The menu is small but varied. The specials have always been a good bet. The shrimp and grits is a very filling southern favorite.
Tuscany -- also on Main -- is a little sterile on atmosphere, but has always delivered excellent Italian fare. The lamb chops sauteed with garlic and rosemary are superb. Excellent soups.
Southern Inn (also on Main St.) is considered by many to be the best restaurant in town. Good white table cloth place with a large, but somewhat uninspiring menu. Good service.
I would avoid Cafe Michel (pretentious, overpriced)
Lexington is best for lunch fare. The Joyful Spirit Cafe on Main lives up to its name with fabulous, flavorful grilled paninis. They could be better with their sides (too many potato chips!), but service is friendly, atmosphere clean and bright.
La Pattisserie has good sandwiches and pastries.
For quitessential college-town fare (pizzas and subs) Salerno (115 Jefferson) is a great local hang out with fabulous prices for huge subs and slabs of very good pizza. The antipasta salad will provide you a great mix of cheeses and deli meats. The clam chowder (New England style) is wonderfully buttery and peppery.
If you care to venture out of Lexington a ways, a little gem in the rough is Franks for the Memories on Magnolia in Buena Vista (six miles east of Lexington). Outdoor cafe with surprisingly great fresh soups and sandwiches. Gazpacho is fresh and zippy; tortelinni soup has fresh herbs and spinach; sandwiches tend to marry nice combinations of flavors like turkey, apple and blue cheese. You order and pick up from a window and sit under an awning (mist-cooled in the summer; heated in the winter). An amazing find in a mostly blue-collar town.
If you want good diner fare, with a touch of updating, head for Fairfield Diner (off the I-81 Fairfeild exit, about 10 miles north of Lexington -- follow the signs). Clean, spartan hilltop diner with unbeatable views of the Blue Ridge, this is the place for fried green tomatoes, meatloaf, and bread pudding.