I always prefer to dine at local establishments when I am visiting a new place.  After all, the food in a chain restaurant is the same no matter where you are.  Why have the same hamburger in a city you've flown thousands of miles to be in that you can have two blocks from your house?  Dining local allows you to enjoy the flavor and culture of the place you are visiting, in addition to supporting the local economy.  
Fortunately, I live in a town that is a vacation destination for many people - Williamsburg, VA.  Home to historic Colonial Williamsburg, Busch Gardens, Virginia's largest golf resort, Kingsmill Resort, and the College of William & Mary, Williamsburg has a wide array of local restaurants that visitors of every age and culinary leaning can enjoy.
Fine Dining
Many of Williamsburg's fine dining establishments are located next to Colonial Williamsburg in the district known as Merchant's Square.  These restaurants include Berret's Restaurant & Taphouse Grill (seafood), Blue Talon Bistro, Fat Canary, and The Trellis Restaurant.  I would strongly recommend any of these restaurants.  The Regency Room at the Williamsburg Inn is another fine dining location in Colonial Williamsburg; note that a jacket is required at dinner.  Le Yaca Restaurant Francais is a well-respected French restaurant located near the Kingsmill Resort.
Mid range
These restaurants are not as formal as the fine dining establishments mentioned above but are certainly nicer than fast food.  Food for Thought has an extremely diverse menu and each table comes supplied with several discussion cards to help foster an interesting, "thought" provoking meal.  Center Street Grill and Ichiban (Chinese/sushi) are located in the Newtown Shopping Center, which also has a movie theater and shopping for those inclined to walk around before or after a meal.  Colonial Williamsburg itself has four taverns which offer you an authentic eighteenth-century meal (note that tavern hours change depending on the season).  Another family dining option within walking distance of Colonial Williamsburg is Season's Restaurant in adjacent Merchant's Square.  Other restaunt options around town include the Polo Club Restaurant & Tavern (very popular with locals), Giuseppe's Italian Restaurant, and J.M. Randalls (classic American grill food, often accompanied by live music, you can check the schedule on their website).
Casual Dining
These local establishments offer food to go and/or will gladly welcome visitors in who are looking for a break from the sun.  Adjacent to Colonial Williamsburg in Merchant's Square is the highly acclaimed Cheese Shop, which has fantastic sandwiches.  (If you want to avoid lines, especially during the busy summer months, look at their menu online and call in your order.)  Aromas Specialty Coffee & Gourmet Bakery has a delicious lunch and dinner menu to go with their coffee/tea/smoothie café.  The Green Leafe Cafe, Paul's Deli, and the College Deli are all across the street from William & Mary's Zable Stadium, within a couple blocks of Colonial Williamsburg; they offer a wide variety of sandwiches and pizza.  Another sandwich shop, similar in style to The Cheese Shop, is The Wine & Cheese Shop at Kingsmill.   If you are looking for some delicious barbecue, head over to Pierce's PITT Bar-B-Q, which has been a thriving local legend for 40 years.  Two nice quality sports bar options in the Newtown Shopping Center include The Green Leafe New Town (same restaurant, different site, as the one near the College) and Corner Pocket, which features thirteen pool tables. Finally, those craving fresh, local seafood will be satisfied at The BackFin Seafood Restaurant, another local favorite.

What vacation is complete without indulging your sweet tooth?  One of the most popular places to cool down is Sno-To-Go, which features snoballs (sno cones) of every flavor imaginable.  I would recommend ordering your snoball "stuffed" with either vanilla or chocolate soft serve ice cream, delicious!  There is also healthy frozen yogurt to be had at BerryBody, which has two locations in Williamsburg, including one next to Colonial Williamsburg.  Finally, the dessert case at Aromas Specialty Coffee & Gourmet Bakery is always full of delicious, fresh-baked treats.
There are a ton of pancake houses in Williamsburg; in my experience one is not that different from the other, so if you're craving a pancake or waffle breakfast, take a drive down Richmond Road and choose the house that looks best to you.  Aroma's Specialty Coffee & Gourmet Bakery is my personal favorite spot for breakfast in town; the Blue Talon Bistro, right across the street from Aroma's, also serves a delicious breakfast/brunch (check their website for the hours each menu is offered).  The Old Chickahominy House was established in 1955 and serves an authentic Southern breakfast and lunch to its patrons; the popularity of this restaurant means there is often a wait, so call ahead if possible or be there when it opens.  The Five Forks Diner, which calls itself Williamsburg's one and only authentic diner, is another local favorite; it is also open for lunch and dinner.
Please note that this article is not meant to be a comprehensive list of Williamsburg restaurants; exclusion from this article does not signify my endorsement or condemnation of a restaurant.  The restaurants included in the article are ones that I have either eaten at or have heard are worth patronizing from reliable sources.  Nearly all the restaurants mentioned above have websites, so while you are planning your trip, check them out and peruse their menus to see which places appeal to you most.  Enjoy your time in Williamsburg and bon appetite!