Tamarine is great on University. Osteria on the corner of Ramona and Hamilton is the best italian food imo although call ahead to see if they have a free reservation. Zibbibo has great fresh food. St. Michaels Alley is a great neighborhood restaurant and is a California cuisine.
If the weather is nice, I like Empire Tap Room for its patio.
Zibibbo (Kipling street) is quite good. And they serve "family style" so you can share the dishes.
Another place I recently visited was Fayrouz Mediteranean/Illusions on California Ave. The mezzes were outstanding. My Iranian friends also thought so and were insistent in not getting entrees as the mezzes are so much better. Very affordable to make a meal of mezzes...
Junoon (Modern Indian) on University is good:
150 University Avenue | Palo Alto CA 94301 Phone 650-329-9644
I also really like Tamarine, which is vietnamese. www.tamarinerestaurant.com
546 University Ave
Palo Alto, CA 94301
Both of these options have a fun atmosphere and modern cuisine.
Can you be more specific of the type of food you're looking for, or the type of atmosphere you're looking for?
I think you'd be challenged to stay under $200 at these places... there is a very affordable Thai place on University Avenue called Royal Siam. The location is great and the food is very good although the atmosphere is certainly not upscale. I spent ~$100 with another couple and we had a great meal. I'd spend the other ~$100 on drinks at Tamarine and desert in the new cake shop next door (forgot the name) or a gelato from Michael's.