Thamel House occupies a restored Newari building and serves Newari and Nepali cuisine in a setting that gives some sense of the traditional domestic architecture of Kathmandu's old families — carved wood screens, brass oil lamps, and cushioned alcoves. This is the place for chatamari (the Newar "pizza" made of rice flour), bara (black lentil pancakes), and aila (Newari home-distilled spirit served warm) if you can find it.
Newari food is genuinely different from standard Nepali cooking — earthier, fermented, and more ceremonially specific — and this is one of the more accessible places to try it in Thamel without venturing into the old city.