Watertown is increasingly a city of chains, as mom-and-pop places give way to Applebee's and a third Subway (no. Really. For 23,000 people, you have three Subways.) But we still do ice cream right, with three places worthy of your attention. One is Culver's, a chain admittedly, and technically it's custard, but still worth it. Another is Schuett's, on Main Street, but it closes over winter and you may be here then.
My recommendation is Mullen's, also on Main Street. The price is affordable, and anything they do involving dairy is golden. Plus you get a cone for a quarter if you go to the gumball machine and it comes up purple. (There's another offer for free ice cream, but it's dependent on the temperature being 20 below or colder, and why you would even be out in that weather is beyond me). The rest of the fare is merely halfway decent, so get in, get the various cow squeezings, and get out.
Favorite Dish: Again, anything dairy. I'll have to give it to the shakes/malts, though. You tell them the thickness, the flavor (and there are a lot, up to and including lemon/lime, which isn't that bad), and they'll give you the metal thingie they made it in, so you may pour at your leisure. (Caution: Metal is a great conductor of cold.)
Right downtown not too far from the river is Mullen's Dairy, an old time Ice Cream Parlor-decorated in the 1950's style with stools that spin and hard candy sticks at the counter. Wonderful spot to stop on a hot summer day!
Favorite Dish: Ice Cream-It's all good!
Okay, I have TWO places tying for the honors. The first is Phil's (South 2nd)--awesome Gyros and good pizza too. My other favorite spot to go for pizza is the bar at Settler's Bay (ever so slightly OUT of town off of HWY 16).
Phil's is anything but pretentious, and it can be fun to suck down a few brews and people watch there. While Settler's Bay caters more to the upscale crowd, it IS a neat place (on the river). If you eat in the bar room it's pretty laid back, and they have a good variety of drinks. The fish fries at SB are also great, served with all kinds of German touches.
Favorite Dish: Definitely the gyros at Phil's!! I've had lots of gyros in my life and they are as good as any in the big cities. At SB, I like to go for the Italian Special Pizza--it's a white pizza with pesto and sausage.