Champaign and Urbana each have their own distinct downtown area (think a tiny version of the Twin Cities). Champaign is bigger, with a larger downtown. Urbana is where we live! Campus is in the middle of the two towns (the intersection on the venn diagram) and is very large, pretty nice, and swarming with undergraduates.
Cafe Zojo has the best coffee, but is a bit out of the way. Cafe Kopi & Caffe Paradiso are near-equals and more conveniently located.
Update 2013-09-29: a new contender has emerged! Flying Machine Coffee is right in downtown Urbana, open all weekend, and the coffee we've tried (N=1) was excellent.
Blind Pig has the best beer. Quality & Crane Alley are also good.
Mirabelle & Pekara have the best pastries.
Our favorite restaurants include Black Dog (BBQ), Maize (Mexican), Siam Terrace (Thai), Courier Cafe (breakfast, burgers, shakes), Xinh Xinh (Vietnamese), Jupiter’s (pizza), Bombay Grill (Indian), and Golden Harbor (Chinese).
Common Ground Food Co-op is a good place to get food if you have dietary restrictions (vegan / gluten free).
Art Theater plays awesome indie movies.
The U of I Arboretum (formal plantings), Meadowbrook Park (restored prairie) and Busey Woods (remnant floodplain forest) are all in town and good for short walks.
Kickapoo State Park (30 minutes east by car) is a good place for canoeing or hiking.