Arro Khampa is a Tibetan restaurant on the central square of the Old Town and one of the better places to eat traditional Khampa-Tibetan food without it being either too touristy or too rustic. The menu runs to momos, yak hotpot, tsampa balls, and butter tea, with a decent vegetarian section. The setting is a converted Tibetan-style house with cushions and low tables.
Service is friendly and English-speaking. Prices are above local average but reasonable for a tourist town. Reservations are not necessary except on busy weekends.