Porto is in the peculiar position of having perhaps the very best restaurant in Portugal -- in the Yeatman Hotel which is owned by Taylor Fladgate -- and otherwise being a surprisingly poor food town given how absolutely marvelous almost everyplace else in Portugal is when it comes to eating. The good news is that all of Portugal is so cheap, that if you ever wanted to "splurge", the Yeatman is the place to do it, because it will cost you one-third of what it would cost you anyplace else to "splurge." The Yeatman is in an extraordinary location for anybody interested in port wine, and it serves absolutely knockout port and port wine cocktails plus has this fabulous restaurant with an iconic view over the Douro and Porto. There is a tram you can take across the river for sightseeing. If I go back to Porto, I am staying there. (I only ate there.)

Otherwise, Porto does better with sweet hotels in its gussied up tourist center than it does with restaurants. Booking.com is probably your best source for that with up-to-date reviews you can read and you can search by budget. Porto is an endless fascination, and not one of the 3 guidebooks I had with me did it any justice. They all focus on the tourist scene by the riverbank, or try to send you out to the flashy art museum. Walk around on your own with your eyes open and try to figure out what is going on beyond the parts of town primped up for tourists. It's not at all dangerous and it is quite fascinating.

Here is the link to the Yeatman Hotel

http://taylor.pt/en/visit-taylors/the-yeatman-hotel-porto/

I agree about the restaurants. We were in Porto for a few days some years back and found it hard to find places to eat somehow--we like simple, local places, nothing pretentious. But we found it tough there--not so north of Porto at all.

But it is a wonderful city. Especially if you love port wine! Do go across the river for some tastings!

We stayed at a really funky place a bit north of the center--Castelo de Santa Catarina. It was fairly inexpensive and basic, but pleasant, in a really unusual old building, an old convent. But a fair hoof to the historic center; we took buses and cabs as I remember.

We'll be back for a couple of days this March--I think I'm going to splurge and book us at the Intercontinental, mainly because it's close to the university where my husband will be attending a conference, and a lot closer to the center.

And we did have lunch at one of the river-side tourist places, and my husband ended up with food poisoning. I was fine, not sure it was, some kind of bad seafood.

If you want a great place to eat in Porto go to O Paparico Rua Costa Cabral 2343. Make reservation 351 225 400 548. This place is owned by a young chef and he and his staff are what the culinary world of Porto should be like. Great food, small place, hard to find, and great service. I will be back there next month and I will be taking my partner there for his 50th birthday. It's a combination speakeasy, cave with rock walls, and it feels like you came to dinner at a friends house. You have to knock at the door with the knocker, they open the window and let you in. So amazing and not that expensive considering all of the tourist traps near the river. Stay away from the river restaurants if you can. It's more quatity than quality!!!

For Lisbon, we can recommend highly the Avenida Palace. It is in a great location, next to the train station, with lots of restaurants and shops to walk to. See my trip report on Lisbon, for details on day-trips we made and restaurants we liked.

http://www.fodors.com/community/europe/lisbon-europe-without-the-attitude-or-price-tag.cfm

Lisbon is a really fun place to visit and there is plenty to do to fill several days.
If you like art, there is the Museu de Arte Antiga which gives you a good panorama of Portuguese art through the centuries (lots of interchange with Flemish styles in the 15th century or thereabouts). The Gulbenkian Museum is amazing but not so Portuguese – it has some very good historic European art and also some fantastic Oriental stuff.
The Azulejo (tile) museum is the most Portuguese museum in town – it tells you the whole history of these ceramic tiles and their various styles.
There is a really big choice of hotels in central Lisbon now so you're spoilt for choice: it really depends how much you're willing to pay and what facilities you want. A good mid-priced option is NH Liberdade. The Hotel Metropole is nice and right on Rossio square, so is ideal if you want to walk everywhere, but it is a bit poky. Or go upmarket to the Altis Avenida, which has a fantastic terrace.
Lisbon has some good restaurants, too, the most fashionable at the moment is Belcanto.
If you like wine (I mean table wine as well as port wine) you might like to look up Have a Wine Day - www.haveawineday.com – they do private day trips to towns with a vineyard visit and wine tasting thrown in so you can pack everything into one day. We did the Evora one, starting from Lisbon, which also included a stop at a fantastic circle of standing stones – a sort of mini-Stonehenge. I think they do Douro wine trips as well, either from Lisbon or Porto.
The train trip to Porto is quite comfy, but actually not that scenic, except the bit near Porto, which runs along near the beach.
I wouldn't wholly agree that Porto is not a good place to eat. I thought the updated Portuguese food at DOP was fantastic and here are some tips from a a friend from there: new restaurant Book next to the Hotel Infante Sagres, Shis on the beach at Foz, “in the mid-price range there is Al Forno (Portuguese as well as Italian, like the name suggests), Canelas de Coelho and Abadia.” There are also cheap places serving tasty local food – you just have to hunt them in the backstreets. None of these are in the central riverside area, which really is very touristy. If you want a riverside restaurant, go further out, to Adega Rio Douro.”
My mouth is watering as I write ... you'll have a great time!

I guess my problem in Porto was that we got really footsore "hunting" those backstreet restaurants. Some were upstairs and difficult to find if you weren't a local.

Those standing stones sound very enticing!

We had such luck in Lisbon being happy with our meals relying on nothing but our eyes and noses, and sometimes the encouragement of locals, it was just too noticeable when we go to Porto that the options were hovering between touristy and some unappetizing alternatives. We actually were staying on the back streets, higher up in the hills.

I've yet to hear anybody say: "I like pretentious places to eat!" but we quickly ended up feeling that if we didn't start seeking out places with some pretensions -- or at least ambitions --- for delivering quality food to our table, we were going to end up not particularly enjoying our meals. Our food was taking such a back seat to the wine we were enjoying in Porto (and not just Port), we began our hunt for quality restaurants with quality food to match -- alas, too late. Next time.

Even when you pay "top dollar" in Porto, you are still way under the price point for comparable meals in France or Italy, or even comparably sized cities in Spain.

We stayed in Porto long enough to talk to a few people and visit both sides of the Douro. The terrible austerity that has beset Porto really makes it next to impossible to invest all that is needed to restore Porto's oldest buildings right now. The weekender tourists come in and head straight for the waterfront, and a great many of them want cheap, cheap, cheap first and foremost. There is more money walking around on the other side of the river, and it is easier to modernize. It's not really fair to blame old Porto for getting by on what it can. I hope tourism lifts up a lot of energetic natives and that more and more tourists come willing to pay a few euros more in appreciation of what it costs to do that in Porto.

One more thought: I think it is a great thing that the Yeatman has made such a spash in the world beyond Porto and even Portugal, getting recognition as being a destination restaurant. It helps frame Porto as more than a "cheap" destination. A flagship success like the Yeatman creates new opportunities for others at lower price points but who definitely hope to capture some sophisticated tourists, willing to spend more to get quality, if not always top prices and Michelin prices.

I hate to disagree with some of our valued posters here on Fodor’s, but if I was staying in Porto for a few days, and wanted something a bit more intimate, then I would look at Four Rooms, a small luxury hotel in old Foz, a stylish B&B, where the Douro river meets the Atlantic (www.4rooms.org/porto/index.php/en/). It's a favorite of the famous Portuguese architect Eduardo Souto de Moura, winner of the Pritzker Architecture Prize, who stayed there when in Porto a couple of years ago when accepting the prize. And from my understanding, he actually influenced the renovation of this small B&B.

The owner of the 4 Rooms will be able to set up any tour of the Douro Valley you might be interested in.

The best restaurant in Porto is in Foz, Pedro Lemos, which serves breakfast at the 4 rooms (www.pedrolemos.net), and is in the process of opening up a new restaurant in downtown Porto.

The Yeatman is fine, and a great location, but I doubt that anyone on this board have every stayed there.

For Lisbon, I would stay at the Lapa Palace (www.olissippohotels.com), it would be difficult to find a more prestigious hotel anywhere in Europe.