Gekko's advice about neighborhood restaurants' availability is accurate.
As for a general response to the OP's original question, you're going to find things cheaper once you're away from midtown. And, if you don't mind spending the time (and possibly transportation money) to get there back, go for it.
It would also give you the change to explore a neighborhood or two that is alive at night--like, say, Greenwich Village.

Adding to the good advice already here, there are a number of affordable places in the Times Square area that are good that are mentioned in the other thread titled something like affordable in Times Square.

Joe Allen's is good basic American food on restaurant row. The Hourglass Tavern is another. Virgil's for Bbq and Trattoria Trecolori for Italian are others. All these places will be very crowded before and after theater but will be quieter from 8-10 pm while shows are on.

I would strongly suggest you invest in a Zagat guide. They have lists of places with affordable 3 course prix fixe dinners (and lunches) and will also give you an idea of prices.

menupages.com is another great tool. You can search for rest. by neighborhood, read reviews and even look at menus.

Some general points--Many diners in residential neighborhoods have good, basic affordable food. I do think it will be a challenge to find GOOD inexpensive seafood. Don't go to national chains you know (like Olive Garden or TGI Fridays) thinking you'll get good food and good value. They tend to be pricier in NYC and NOT as good as at home.

Don't discount French restaurants. Many have very good steaks and french fries (steaks frites on the menu) if you like that.

One place you should consider is Kitchen 22 (downtown) or Kitchen 82 (uptown). Excellent American with a full meal for $25/person.

Have fun!

Thanks for the tips. I don't mind missing out on the newest hotspot as it is all new to me!!

You can almost always get into local neighborhood restaurants by just walking in. Reservations are rarely needed - except perhapd prime time Fri or Sat.

But $12-$15 is very low - even for a neighborhood place - esp fish. You can get a lot of casuale ethnic places for that amount.

But - for instance - neighborhood Italian - pasta is $11.95 up to $16.95 (with salmon or shrimp) and chicken/veal are $17 to $24. And this is upper west side neighborhood - good food - but nothing fancy at all.

My uncle from CT who would often be in NYC on business would find pubs and eat his dinner there. He found that they were casual, good bargains and good food, so it totally was his style.

I am happy with neighborhood delis and pizza by the slice, most of the time. Coffee shops can be pretty good food also. Used to have a Greek coffee shop on the first floor of my apt. building that had very good, basic and fairly priced food.

Maybe this is more cheap eats, but living alone in NYC, had to get by.

And there are plenty of pubs with very good food! Walker's, Grand Saloon, Ear Inn, Old Town Bar...to name a few.