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Shwe Pyi Moe restaurant.: Everyone comes here.
This is THE place to hang out in the morning, everyone seems to come here. It's very basic, in the local style, but the atmosphere is tremendous. Guidebook-wielding backpackers rub shoulders (literally, it can get crowded) with locals chatting, drinking tea and reading newspapers.
I'm not sure if the waiters are on commission, but the service is efficient to say the least. They run about like dervishes and virtually fight each other good-naturedly in order to serve you. It's a wonderful place to fortify yourself for a hard day's sightseeing.
The menu (available in English) is a mix of local standards and backpacker favourites - yes, the ubiquitous banana pancake has made it this far!
Favorite Dish: The Shan noodles and tea - a great Burmese breakfast.
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