I believe the best food is at Darjeeling and not Gangtok. That said, Cacao and Bakers Cafe are great two cafes, on MG Marg, to spend the leisurely evenings at. While the cookies and tarts taste better in Bakers Cafe, the ambience is more suited for a conversation at Cacao. There is a CCD too in the hill town. A roll joint that goes by the name of Roll House sells mouth-watering cheese rolls – not for the strict health-and-hygiene-conscious though. Apna Dhaba is a standard Indian joint. The Square serves good food and boasts an equally appealing decor. I was not too happy with the restaurants till I discovered The Square, in fact.
2014 update: A friend who visited Gangtok recently found the service at The Square pathetic but he did highly speak of a cafe called Cafe Fiction.