On Rue Serrajine in the Medina, just inside Bab Bou Jeloud you'll find Le Kasbah.
In Le Kasbah
You can certainly find cheaper places to eat in the Medina than Le Kasbah but with excellent food, good service and a rooftop terrace, it's well worth a visit. But don't let that or the fact that only tourists seem to eat here put you off.
I was very tempted by the three course menu for 70Dh but as they give you so much bread, dips and side-dishes the single main course for 40 Dh was a wise choice. We both had lamb tagines. The total cost was 99Dh for two including water & mint-tea
Restaurant Bajelloul in La Ville Nouvelle on Rue Arabie Saoudite is a small local restuarant. It gets some tourists but at lunchtime is packed with locals dining.
It's at the cheaper end of restaurants and is fairly basic. There's seating outside near a busy road, where you can watch the local colour.
Locals all seemed to be having a set menu (everyone was basically eating the same dishes and was brought yoghurt...), but I was happy enough with my meal here. All the mains were 30 dh, not the most exciting menu, but it did have plenty of sliced heart and liver, if you're into that.
I had a steak grill, eating companion had kefta meatballs. Both came with a fried egg and some very nice fried potato. For 30 dh you can't really grumble.