For dinner we recommend Mesón Las Conchas, on Calle Mayor 16. You can sit outside (weather permitting) or in one of the two dining rooms with lots of character. The " parrillada de carne" (grilled meat) is very good (35€, serves 2-3 people). Dinner will run you about 25€ per person.
If you want to have dinner in another area, we recommend Calle Van Dick (north of the city, 15 minutes walking), brimming with tapas bars popular with locals. If you want to sit down, we like Don Cochinillo Asado (Van Dick 55, just before the intersection with Paseo del Doctor Torres Villarroel). We recommend sitting at one of the wooden tables first (tavern style) and ordering food at the bar (they let you know when it's ready). Bar snacks with a draft beer are 2€. The suckling pig and the meat-stuffed mushroom "pinchos" are both great. For the main course, get the "parrillada de carne" (grilled meat, 20€). It is huge! The 2 people one easily feeds four. The whole meal costs 10-15€ per person.