This restaurant is located in the old city. I read about it here on IgoUgo and happened to see it while taking an English tour of Gammla Stan. The tour guide told me that the food was very good, so we stopped in. As you enter you find a few small tables and a counter where the candle holders are covered with wax drippings. This sets the atmosphere as you go downstairs to the brick cellar where more tables await.
This building is from the 1400's and is an original piece of the old city. There are some swords and armor and each table has a clay wine jug with a burning candle. The waitress was very friendly. She took my friends' orders in Swedish and then tried to take mine. I looked blankly at her and she apologized before speaking perfect English. The food was quite good and of course, traditional Swedish. We had the Plank Steak which of course is cooked on a wooden board with potatoes and vegetables. It was very good and the portions were quite large. To drink, I had the Swedish apple cider, similiar to Cider Jack. There's many other traditionally dishes such as lox pudding (made from salmon and potatoes), reindeer, and waffles for dessert. However, if you aren't feeling adventurous you can get a hamburger too!