Kitchener has been into tapas/small plates lately. I enjoy Public (foodies), Belmont Bistro and Gilt (trendy, decent cocktails). The food at Imbibe is good, but it's mainly about the craft beer.
In Waterloo, I like King Street Trio (contemporary, local ingredients) and Taco Farm (taco bar/Mexican fusion). The Bauer Kitchen is comparable to Trio and very popular but somehow doesn't do it for me (it has been a while, I need to go back).
Plus, of course, any place in town or out in the villages that serves schmecky food!
