The center of tourist life in Zakopane is the charming pedestrian street, Krupówki. Like most central walkways in Europe, it is lined with restaurants, pubs, museums, travel agencies and not to be missed: souvenir stands. Every now and then, you can spot old style Polish highland architecture in an old wooden house or pension.
Krupówki starts (or ends) right at the foothills (and the train base station) of Gubalówka mountain. Here is where the street is most touristy: souvenir stands litter each side selling wooden sculptures, wool sweaters, folk handcrafts and of course the famous oscypek, a smoked cheese made of unpasteurized goat or sheep’s milk. By the way, everything is so DAMN CHEAP here, that it almost makes you cry. You can buy oscypek for about a $1.50 (a little less than a pound) or a set of hand-carved chess for $20. But the deal of the century had to be when I purchased a beautiful, hand-knit wool sweater (oh man is it thick and hot) for less than $7! You can't even buy a hand-made scarf for that much in the US, and the few times I've seen hand-made sweaters for sale they were closer to $300.
As you walk down past the stands and cross the busy street, Krupówki becomes more modern and diverse. You can find some great local places to eat here, as well as a plethora of pizzerias and fast food places. Try a freshly made waffle with whipped cream and fruit (gofr z bita smietana i owocami) or a round pretzel (obwazanek). From my years of living in Poland and many travels since, I always found that street-side foods provide the authenticity and the rustic feeling of being in the old world. And nowhere else will you be able to get a generous snack to munch on for so little (usually less than a US dollar).
When you’re ready for a real meal, seek out restaurants serving rydze z patelni, a delicious type of local wild mushrooms, sautéed with butter and spices, and oscypek z grilla, grilled smoked cheese, usually served with cranberries or mushroom sauce. Restaurants will also serve a variety of game: wild boar, venison, pheasant, etc. They tend to be pricier here than on the outskirts of town, but still extremely cheap by the western standards.
Word of caution: just as Kraków’s Squarecentricness (as aptly described by Dea Birkett on the Travel Intelligence web-site) pulls you in to the Market Square, just as strong is the gravity of Krupówki in Zakopane. So the best way to combat it is to simply leave town and go hike in the mountains, or see some of the magnificent places around it.