The reviews on here are pretty old, so just to update you. Antonios Restaurant (Taverna) is located on the beach just behind the Sacallis-Inn Beach Hotel. This is a family run restaurant and not only provides the warmest Greek welcome you could expect, but the food is excellent.
Sacallis Inn is the name of the hotel now, and Antonios Restaurant is the beach front taverna. Spent 2 weeks in Kefalos, and ate here pretty much most of the time.