Quite a lot of British ex pats in the area so you will find the usual fish and chip shop and curry houses etc. However worth a try are La Plantano, C/Paraje de Huetor, Los Romanes, Tel 0034 629 779 039. This is a Spanish restaurant overlooking the lake. The one next door it quite good too, but this is my favourite. You could also try Jurgan's at Chiringuito Antonio, Puente Don Manuel Tel 0034 630 821 761. Jurgan used to have a fabulous restaurant on the coast, but moved to larger premises. I'm not sure if it's as good but he's a lovely guy and used to do steak to die for.
Now, if you fancy a drive to the coast there are some very good restaurants along the front from Torre del Mar to Mezquitilla. (and further, but I've got to stop somewhere!) Let me know what sort of food you like if you want any specific recommendations.

Cheers Kayley, we like all sorts of food, but especially want to avoid the 'english' type places. Local traditional food is what we are after. Is the area pretty laid back and relaxing?

I only ever go to that area to visit the farmer's market. It's a good market but a little cliquey!
Living on the coast (Mezquitilla/Algarrobo) I can only vouch for those places, and Torre del Mar which is very popular with Spanish tourists.
If you are willing to move away from your doorstep, you will find that you have picked a great area and I'm sure you'll have a wonderful time. I live here and I lovei t!

I'll have a car, so more than willing to travel about a bit. Heading there in July, cant wait