The absolute best restaurant in Newport is PANACHE on Olive Street. It is in the Nye Beach area across the street from the Newport Performing Arts Center. Chef Tom and wife Linda are superb hosts and the food is to die for! Do a Google search for PANACHE Newport and take a look at their web site.
There are some stand out places in Newport and I have included web info where I can on our favorites. Some are finer dining than others and yet you can wear jeans to any of them. Most of my picks are in Nye Beach (the ocean front section of Newport), but not all. There is more info on my blog from our trip there in May: http://www.waterfrontbakery.com/blog/index.php?m=200805
Here you go, let us know where you end up and what you think!
April's at Nye Beach (Finer dining, very romantic; no web site, fantastic food) 749 NW Third Street, 541-265-6855
Quimby's (diner style with a gourmet flair, also in Nye beach) http://www.quimbysrestaurant.com/
ARR Place Restaurant. I guarantee you tourists do not go here. ARR Place does not advertise, they are not listed on the Lincoln County, Nye Beach or Newport web sites, the sign is small, they are on a dead end off of a side road, and I only found a few travel sites that mention them. ARR is for the owners Aimee, Robert and their daughter and sometimes helper Rebecca. This couple is doing the restaurant thing the way they want to do it. It is a bit kitchy and fun and with only a few tables and a long bar to sit at, you may end up sharing your table if there is room and others are waiting. The kitchen is wide open so you get to see everything and they can see you. There is a short printed menu to get you started, but the main menu is on a chalkboard and changes with the seasons and their whims. This is a standout place and I LOVE it! (A sign says: If you want water ask for it, and if you ask for it drink it!) Aside from being fresh, seasonal, homemade and sourced locally, the food is creative, abundant and delicious! The "Chinese BBQ" chicken skewers with hot mustard sauce were tender and flavorful, and the 'Tortilla Cake' was so innovative! I have never seen anything like it before and with a bit of Chinese 5-spice it was also surprising. Our appetizers were very unique and so good that we shared a bite with the neighboring table who was admiring our food (We were so comfortable there, I could have moved in!) Some homemade pasta and bread, an amazing steak perfectly cooked, and we took dessert to go for the next night's dinner in our room. (I am so sad that I never got to eat my creme caramel because our room refrigerator got turned off somehow and it was in there over night with no cooling. sigh.)
Panini Bakery-another standout place. Get there early for fabulous breads and pastries, or come in later for wood-oven pizza.
Cafe Stephanie if you are there long enough for another breakfast out: http://www.nyebeach.org/home.cfm?dir_cat=39080
Canyon Way Bookstore & Restaurant (Finer dining, gourmet and really fun; It's over closer to the Bay than Nye beach)
And this next one is not in Newport but believe me when I say you have to hit it. Otis Cafe in Otis, OR. It is maybe 30 mins north of Newport, so good to hit it on the way in or home. Preferably for breakfast but you probably cannot go wrong any time of day.
Be prepared to wait for one of the 8 tables.
I know that most of these web sites aren't great and you can email me if you want more info. Have fun!
Just answered the question for someone else. I also love Sharks most of all-but it's tiny, so be prepared. My folks live in Oregon and love Saffron Salmon and April's, but I haven't tried either (they are big foodies, though, so I trust 'em).
The Sylvia Beach Hotel is fabulous if you like offbeat. I also really enjoy their restaurant-prix fixed meal, very reasonable, family style. I have some fabulous dinner experiences there.
SOme recs for ya here: http://portlandfood.org/index.php?showtopic=1702&hl=Newport
Best place I have eaten there lately has been Local Ocean. Great fried oyster plate, tasty nicoise salad, and good service to boot.