Lot's of good restaurants in Key West! You have to be willing to travel further down Duval Street to find several of these:
Italian: Antonias & La Tarattoria
Seafood: Seven Fish (probably one of the best restaurants in town)
Continental: Cafe Marquesa & Mangoes (for people watching on Duval St.)
I would also check out the following link which provides links to many of the restaurants mentioned above:
http://keywest.com/restbar.html