Mike's Breakfast is one of those places I knew about before I even came to Nepal, and I'm not even sure how. Its been around for quite some time and is an expat staple for food. Mike apparently was a peace corps volunteer back in the 60s and opened the restaurant in the 80s. They have locations in both Kathmandu and in Pokhara. The Pokhara location is in lakeside right on the lake, and the Kathmandu location is in Naxal set back from the main street in a garden set next to a Rana style Newari home.
As stated in the header, the food is more than just breakfast despite the name, and it has some of the more authentic western food in the city. That said you should also be prepared to pay something a little closer to western prices. The breakfast dishes include the normal combination plates offering eggs, toast, muffins, home fries, bacon, sausage, yogurt and mixed fruit. They also offer pancakes that are much better than what most Nepali places serve, French toast, breakfast burritos and waffles. My personal favorite is the special waffle with yogurt and mixed fruit. They also offer a variety of coffee drinks, and teas.
Now to be entirely honest I've almost always eaten at Mike's for brunch with friends and thus my experience is mostly with the breakfast food. I have however tried some of the Mexican dishes that they offer, and while it's nothing that would be memorable back home, it is better than most of what you can find in Kathmandu. They do also have rotating specials that include steak and rainbow trout, but the price has usually kept me from trying them. Which is generally how I feel about Mike's, the place has good atmosphere, and decent food but I always feel like the bill is just a little higher than the quality and content of what actually got served.
That negative bit said, I do also find myself going back, so I don't mean to be too negative. The truth is that if your with friends and just want to make sure the food you order isn't just a bad imitation of what you wanted, Mikes is the place to go. It's also a good stop before or after a trek, or a hard day of mountain biking. It's convenient locations is central to where most expats are in Kathmandu and makes it an easy meeting point as well. If you're traveling to Kathmandu and staying in Thamel though, it is a bit out of your way, being just East of the palace in Naxal before you get to the police headquarters (west of the petrol pump).