The Cafe (Xining bingguan) in the Xining Hotel at 215 Qili lu. The best "cafe" in town--a vast Chinese-style hall with big round tables where enticing Mongolian hotpot buffet can be had for a cheap RMB35.
Yongfu Hotel (Yongfu binguan) on Jianguo lu/Binhe lu. This hotel has a small restaurant that serves cheap dishes. The area around the hotel also does decent Muslim food.
Xiaoyuanmen Restaurant (Xiaoyuanmen shifu) on Dongguan dajie. Serves good Muslim food.
Mazhong Rangpi Restaurant (Mazhong rangpi fandian), not far from the Daxing jie night market. Prices here are extremely cheap, a section for just RMB4.
Yinghua Mianpian Restaurant (Yinghua mianpian fandian), reached using bus No.33 from the railway station, getting off at the Shaanshantai stop. Serves large bowls of these squares of noodles for RMB5.
Shang Yi Da Xia at 190 Dongguan lu. Small Muslim restaurant that does some good hotpots.
Qinghai Minzu Hotel (Qinghai minzu binguan) on Dong dajie/Huayuan lu. Has a good restaurant within.