Eating in Madrid is quite costly (minus the perritos callientes, or the occasional (excessive) bocadillos (sandwiches) of lacon and queso).
I have found the best deal though is offered almost anywhere you can go, and it's called the Menu Del Dia. Normally priced around 10 Euro (about 14-16 dollars depending on what the current rate is) you get three courses and anywhere from 1-3 drinks, depending on the place.
Yesterday's Menu Del Dia was at the Italian place across the street from school. I had: Risoto with cheese and mushrooms that was so delicious I was delirious, chicken curry with roasted potatoes, home made tiaramisu, and a beer for 10 euro.
The day before? Well that was out in the countyside by Segobriga, so for 13 euro I had: a chicken broth soup with chunks of chicken, ham and noodles, beef skirt steak (from a "baby cow" is all I could figure out), french fries, bottled water and ice cream.
The best thing about the Menu Del Dia is that you often have 3-4 choices for each course or beverage. One bad thing, sometimes you have only one choice of beverage, and that choice is a beer with sprite mixture. Literally, half a glass of beer, topped off with Sprite. I haven't run into this little guy yet, but let's just say I am skeptical.
Skeptical or not, I have refused nothing that has been offered me since crossing the borders of Spain. One other little gem worth mentioning is the Doner Kebab joints that are scattered about Madrid, one of which is also next to school. This is the type of place where there is meat slowly rotating in the window, and once your order is placed they shave some off for a nice little sandwich. By far the cheapest meal I have found here, for 5 euro you get a sandwich (in sort of a flatbread wrap) with chicken, lettuce, tomato, onion and a white sauce that is somewhat of a yogurt sauce, but not really. You also get a can of soda and fries. Needless to say, the Doner Kebab joints have become a favorite of all of us.