Taberneros or La Camarilla
These are pretty different restaurants... I think the best thing about Taberneros is their wine selection (by the glass and otherwise) and warm atmosphere. I've found the food to be a little hit and miss at times (there's a mix of traditional and fusion type dishes--the chef is Japanese), though it seems that when we take visitors from the US, they invariably name it as one of their favorite spots (maybe because they're tired of having to eat tapas standing up--madrileño style...).
La Camarilla is more traditional foodwise. The food is simple and well prepared. You can mix up tapas and entrees.