We love St Augustine, it is so different to Orlando. Very laid back with a good deal of history. Check out a couple of my trip reports (Keys to The World or Fred and Wilma - They're Back and They're Child Free) if you want some ideas of what to see and where to eat/stay.
On our first trip, we stayed at a lovely B&B - as nice as it was, it wasn't really us as it was too 'personal', I almost felt like we were staying in somebody's home. Some might like that, it wasn't for me.
Last August we stayed at the Hilton and it was great. Very central and within walking idstance of pretty much everything.
For food, it really depends what you want. Seafood is a speciality at many of the local restaurants. Not being fans of seafood, we chose places that were more American fare. I would definitely suggest that you avoid Athena, a Greek restaurant just off the bayfront. It was dire. We loved the Florida Cracker Cafe and Mango Mangos (although you would need to drive there as it is along the old A1A across the Bridge of Lions).
Another favourite place of ours is Scralett O'Haras. As the name suggests, it is an old-fashioned tavern-type place , loosely themed around Gone with the Wind. We had some drinks and a bunch of appetisers there in August and it was all delicious.
For things to do, the Alligator Farm is a great place to visit, the lighthouse is also fun and the view from the top is phenomenal (although it's quite a climb) and the Castillo de San Marco is well worht a visit, from the historical perspective. St Georges Street in the evening is a hive of activity, with lots of little boutique shops and sometimes a craft fair.
