Aguas Calientes Near Machu Pichu
agreed, for a sit down place, Indo Feliz is your best bet. If you are more into the "local" fare there is a market near the square center and if you go up the stairs there are market food stalls having the usual Peruvian fare arroz y pollo and juice bars. Across the bridge by the soccer field there are some food vendors set up there.
I was only there for a day, but I had lunch at Indio Feliz, and it was pretty good. (From what I heard, great food is hard to find there.) The food was fresh and really pretty. I'm vegetarian, and I was with a group with all different diets, and everyone found food they liked.
The portions were much larger than I expected, but I also had a low appetite at the altitude.