We went there for our honeymoon last May. Kauai is absolute heaven!
We stayed in Kapaa, so I'm a bit more familiar with the restaurants in that area. I would highly recommend Coconuts for a nicer restaurant (but not one you have to dress up for necessarily). There's a really good Japanese restaurant in Kapaa too (Kintaro) - with really good Mai Tai's
At the Coconut Marketplace in Kapaa, there are a couple good restaurants - Eggberts has great breakfasts (their Eggs Benedict is their specialty) and there is a burger place (Burgers & More, or something like that) that is towards the back of the mall.
In Hanalei, you gotta try Bubba's Burgers.
Smith's Tropical Luau was really good - the grounds there are beautiful. And the food was good too.
I would recommend renting a Jeep rather than a regular car, as that gives you more options for getting around the island. There is a great beach that is about 5 miles off the end of the road on the southwest side of the island. It takes you to the southern part of the Na Pali coast. It's a beach where the locals hang out.
We took a helicopter tour on our first day of our trip, which was great because it gave us a great view of the island from above before we explored down below.
For Waimea Canyon, we drove up the highway as far into the mountains as it would let us (which is about 10 miles or so, if I remember correctly). There are great lookout points on both sides of the mountain, which give you great views of the Canyon and of the Na Pali coast. There are lots of good hiking and 4x4 trails that are free, as they are a part of a national (or is it state?) park.
If you like horseback riding, the Princeville Stables have some nice tours that take you out to a privately-owned waterfall (owned by the stable). You have lunch out there and get the chance to go for a short swim under the waterfall.
We also did a boat/snorkeling tour on the Na Pali coast. We went on smaller boat, which got us to a great reef to snorkel in. It was a family owned business, with the father and son running the catamaran and the mother who prepared lunch (homemade cookies for dessert)
Have a fabulous time!!