Although the quality has slipped a bit in recent years, Restaurante A Coutada was my overall favorite restaurant when I lived in Lisbon, and it is still one of the most reliable traditional kitchens in the city.
Although soups aren't the most inspired creations of Portuguese cuisine, the sopa campesina is lovely: bits of cabbage, some macaroni, and red beans in a light broth of puréed potatoes and carrot.
Everything is good: check the pratos do dia (daily specials) first, and if they have the chicken cabidela, grab it (best version of the dish I ever tasted anywhere, including the north), although it will most likely be masking under the picturesque name "frango á tripeirinho". Usually there will be a rice dish special, like an arroz de marisco, arroz de polvo (octopus), arroz de corvina (firm-fleshed white fish--can't remember the English equivalent), or arroz de pato (duck rice). One the house specialties is balchão de gambas--a Goa-inspired, kurma-esque creamy curry of shrimp served in a green pepper with rice (they also do this with chicken). Also excellent are grilled meats on huge skewers--I particularly like the thick pork tenderloins wrapped in bacon, served with arroz de feijão (rice stewed with red kidney beans).
You'll really have to work to spend more than $25 a head here.
It's near the Campo dos Martires do Patria, which is easily reached by the No. 760 bus from Praça da Figueira or Cais do Sodré...from, there it's best to ask, as the side streets go off in odd directions. Closed Sundays.
Restaurante A Coutada
Rua da Bempostinha, 18
1150-066 Lisboa, Portugal
(+351) 21 885 20 94