Cafe de Oriente - Restaurant

This one is more for the experience and view rather than the food. It is located in the Plaza Oriente which leads to the Palacio Real, and the view is gorgeous and on a nice day sitting on the patio is absolutely perfect. They have over-priced sandwiches, but the view is great and as long as the weather is nice, it's worth the jacked-up price (the same thing goes for cafes inside Plaza Mayor; they're over-priced and the food's not great, but people eat there because the view and the atmosphere make it worth it).