Riverstone and Miss Lilly's are my #1 and #2 favorites in Townsend too but lots of times I go for just quick at the Subway or Burgermaster but don't like them as much . Miss Lilly's has a great sunday brunch thing that is really nice.
When I am fishing over in Cataloochee I love the Maggie Valley Restaurant. It is always real crowded on the weekends with locals and lots of good country cooking there. Hamburger steak with gravy, some awesome mac and cheese (they run out quick) and great rolls.