Flour Garden in Harrisville, at the light (and by "the light", I mean the only one in town, on US 23). Great breakfast, have only had lunch there once but it was also very good. Service is friendly and efficient. Also a tiny grocery attached with interesting food to supplement the IGA a block away. There is a bar next to Flour Garden which has cheap ordinary bar food.
Tawas--lake perch dinner at Barnacle Bills; one time we had it, it was sublime, the next time merely good. Be forewarned that it is a bar so smoky. Also chock full of Republicans :)
We ate at the Antler Cafe on Newman Street in Tawas a few years ago and it was pretty dreadful. I believe it was up for sale so may be under new ownership now. The coffee/chocolate store on the corner is good for that sort of thing. And the tiny book store on the same street is struggling, so if you need a beach book please consider it. They have a good selection of used paperbacks for that very thing.
Oscoda-Wiltse's Brew Pub for lunch, Mama's Kitchen for breakfast. Nothing fancy but decent.
A little further south, in Au Gres, H&H bakery for lake perch sandwich--a steal at $6.99. Cookies from the bakery are great, but avoid coffee cake as it tastes like it came from Kroger.
All these are pretty low end. I don't know of too much in the area with higher aspirations; there's a steak house next to the Big Boy in Tawas that looks like it's trying, but we haven't checked it out.
We tend to camp when we're up there so we spend more time in the IGA, Niemans in Tawas or Glens in Oscoda (NOT WALMART IN TAWAS--ptooey! it's a sin to have a Walmart right on the freakin lake!)
I love the "sunrise side"--it is totally non-gentrified. Wish Obama would listen to all those people who say give everyone over 50 a million dollars--I'd be up there in a heartbeat!