Nage is my favorite restaurant on the planet. The menu is always interesting and food and service are always top notch. Last time there they featured a seared beef heart app that nearly broke my heart, and redefined beef flavor.
Tried Espuma a few months ago. Apps were inspired, esp the lobster roll. Entrees were good, but more conventional. Neo-Classical Paella was very good, but I'm not sure what was Neo about it. Tried to return a couple nights later for tapas, but they wouldn't serve them in the main dining room and the bar was tiny and crowded with very boisterous revelers.
Ended up at Planet X that night instead. Great atmosphere on the porch, but the food was just so so. The Jumbo Shrimp Red Thai Curry was remarkably well seasoned, but poorly designed. Raging hot (temp) rice and sauce fiercely overcooked the veg and shrimp piled on top. The shrimp were also a far cry from jumbo. Wildly overpriced in my opinion
19730 Coastal Hwy., Rehoboth Beach, DE 19971
Big Fish Grill never disappoints for fresh seafood.
I agree with another commentor that Lupo is wonderful for Italian.
Henlopen City Oyster House is very popular right now. It is on Wilmington Avenue.
Fins still has a very popular Happy Hour.
My favorite Rehoboth restaurant is The Cultured Pearl but I must mention that it does occasionally receive bad reviews on Chowhound during the busy summer season.
I agree with monkey, Saketumi is quite nice.
Nage is great!
I think Louie's is the best pizza around.
In Lewes, Fish On is excellent and around Second Street there are so many special restaurants but probably Agave is the star there right now.
if you like beer there is also Dogfish Head Brewpub. The one time I visited made it clear I'd need quite a few visits to properly explore the beer list, and it would change before I finished. Their brewery in Milton (a few miles away) wasn't open for a tour when I was there, alas, so I had to settle for sampling the brews on tap in Rehoboth.
go to the Mid-Atlantic page and type in Rehobeth Beach and search and you will come up with a ton of blogs on Rehobeth. I like Stingray for latin-asian fusion and sushi, Zebra for italian, cultured pearl for sushi. I also love Blue Coast in Bethany for fresh seafood as well as Difibo's in Bethany for italian.