Most of Oaxaca's better restaurants are quite new, but La Catedral has been around since 1976. It is a Oaxaca institution, and besides reliably tasty food, you can also expect a lovely atmosphere and seamless service. You can pick a spot in one of the indoor dining areas, or in the lovely back courtyard next to the fountain.
The menu at La Catedral is extensive and includes Oaxacan specialties such as mole negro and mole amarillo, as well as chiles rellenos and sopa de guias (soup made with zucchini shoots), but my favorite dish is the huitlacoche crepes. They also offer a buffet on Sundays from 2 to 7 pm that is popular with well-to-do Oaxacan families.