The Market is always an interesting place to explore and eat. One of our favorite stands is called "Los Chinelos", however it doesn't have a sign--you can ask in the Market for "Doña Ruth" or "Los Chinelos" and someone can point it out to you--otherwise, all of the other stalls are also delicious options. Market stalls open in the morning and generally close in mid afternoon, around 4 or 5 pm.
El Milenio is a small restaurant near the center of town (calle Artesanos) that serves vegetarian options. Here you can find tofu baguettes, vegetable soups, falafel, etc. It opens around 11 am and serves food until around 6 pm.
La Sombra del Sabino is a pretty restaurant located on calle revolucion, also a bit outside of town. It opens Wednesdays through Sundays 10 am-7pm and serves vegetarian and carnivorous options, with a mix of Mexican food and "gringo" food. This restaurant also has good coffee, a lovely outdoor patio with a view of the mountains, a book store with new and used books in both English and Spanish, and an English speaking staff.
http://www.lasombradelsabino.com.mx/
Restaurante "Shalom", located in the warehouses (bodegas) outside of the center on calle revolucion has delicious organic vegetarian food. It has falafel with a salad bar, desserts, and traditional mexican food. The warehouses are located next to the cemetary, and have a beautiful view with a grassy area as well. This restaurant is located in the same area as the rock climbing gym.
"Pizza Nativa", on calle Buena Vista, in between La Posada del Tepozteco and the market, has very tasty thin crust pizzas and salads. Kike and Citlalli, the owners, both speak English. They open Thursday-Sunday after 6:30 pm.
"Hecho en Casa" is a bistro located on calle Isabela Catolica, in the center of town. Marie, the owner, is a wonderful french cook (she's SO good that she's going to cater the wedding) and she makes a different menu for lunch each day. Her restaurant can be hard to find. There's a sign outside what looks like someone's house--go in through the yard and up the stairs. She serves food from 12 pm to 4 pm.
"Los Colorines" is a nice Mexican restaurant with traditional decorations and food. It is located on Calle Tepozteco. It has the same food as the Market, but in a more formal environment.