Hip place with good vegetarian food in Palo Alto...
If hip means t.m. or b.p., then I'm not sure Palo Alto will really cut it, especially downtown. Vaguely close to hip would be Mantra, and the food there execrable when I went. Alas, you have to be in the Judy Rodgers-class to pull off hip and delicious at the same time.
However, cozy and romantic Janta on Lytton might serve your need. I happily go back every few months, as I have for a decade. Nothing will floor you, but the atmosphere and often good food make for lingeringly delicious dates.
Considerably hipper is Bodeguita del Medio, on California Avenue. What? you ask. How could that Cuban place serve a vegetarian? Fact: the vegetable main, the fried plantains, and the moros y cristianos are all reliably excellent. And rum is widely consumed by vegetarians.
Two great places for vegetarians in Palo Alto:
1. Tamarine - a hip Vietnamese place on University. Great ambience, great drinks. Menu has some unusual entrees not seen in the typical mom-n-pop vietnamese place.
2. Mantra - a hip new Indian-French fusion place started by the same chef who used to run Amber in Mountain View. Highly recommended.
My first thought was that hip in Palo Alto is an oxymoron and I've lived in this area for most of my 50 years of life:). However, others less jaded brought up Tamarine and Bodeguita del Medio. I've been to both places, and both times did have that spectral sense that I could have been - maybe - in New York. Which is where I spent the few of years of my life not here. And which is, to the point of the razor's edge in my opinion, the definition of hip.
Another way to get hipness is to go for authentic, sort of post-modern if you will. i.e., go to a taqueria in Redwood City's little Mexico, or down to Milpitas to Nutrition House for Dongbei Chinese:). But then you do have to bring your own boutique gin for your martini.
Tamarine is a good choice for what you're looking for. You may also want to consider Three Seasons which is the less expensive version. My vegetarian friend loves that place.
I've been meaning to try out Quattro at the Four Seasons in E. Palo Alto. The reviews sound promising. From what I've heard from a coworker, all the Silicon Valley trophy wives and fashionistas hang out at the lounge for cocktails. That place might fit your hip quotient requirement.
You might try Zibibbo. Reports are it has taken a slide. Sister restro of Lulu in S.F. Decor and hip factor...Cali Modern, sort of a scene at the bar. It's a nice place. They definately have a veggie options but they specialize in oven roasted meats. They serve family style.