Around Donegal Town there are a variety of place, some I've tried, and some I want to try!
Aroma @ The Donegal Craft Village. Very small cafe, nice entrees and great deserts especially the Orange Cake, and decent coffee. Inexpensive. Say Hello to Jackie for me. ;)
Blueberry on Bridge Street: Very good basic lunchs, great soups. Inexpensive.
Also, on Bridge St, a very surprisingly good Italian place.
Coxtowns Manor, near Ballintra: Old country Manor now owed by a Belgian. Food is supposed to be very good, all organic and much of it locally sourced. Place has a lot of charm & history. (Haven't tried it yet, but this summer I will).
Harvey's Point @ Lough Eske. Belgian owned, french influenced cooking. Very good, Expensive, great views of the lake & mountains, but building a bit modern looking and out of place for such a senic spot.
St. Ernans (near the Donegal Craft Village). I haven't tried this, it's very expensive, food is supposed to be really good. It's on a island connected to the shore via a causeway. Also, supposed to be a romantic place to stay.
Castle Murray: Between Donegal Town & Killybegs, on St. John's Point. One of the nicest meals I've had in Donegal, & good service.. Price Mid-range. Nice views of Donegal Bay. Call ahead to book. Also, a high class B&B.
Burtonport, in the NW of the county: Skippers Tavern & The Lobster Pot are 2 good seafood place, maybe the best I've tried in Donegal. Skipper's is very informal, but I think some of the best seafood I'd tried in a long time. The chef is spot on, place feels more like a pub with grub that a restuarant, which show in the service & ambiance a bit, so it's not a romantic spot, but I really think the food is worth checking out (or it was 2 years ago). The Lobster Pot is a lot nice looking, and the owner is from the US, but I don't think the food is as good.
If your in Letterkenny, there are 2 decent places down the bottom of main street, the Lemon Pepper and another place directly across the street (don't remember the name) that have been recommended to me.