By the nature of things, the following is generally personal preference, with some input from cabin guests. Pubs and restaurants change in quality, so these recommendations may well get out of date, but they were last updated in March 2012.
First of all, I hear consistently good reports from cabin guests about Ludlow's Michelin-starred restaurant, Mr Underhills (www.mr-underhills.co.uk), although we haven't ourselves been there yet - maybe it's time to take the plunge and stretch the budget. La Becasse (www.labecasse.co.uk) also used to have a Michelin star, but lost it in this year's guide although it's difficult to see why - their lunchtime menu is good value. Both restaurants get well booked in advance, so if you're planning to come and stay, and you like the idea of a treat, you need to think ahead.
For some time now we've recommended the Jolly Frog (www.jollyfrogpub.co.uk), about 8 miles away, just outside Leintwardine. We've been back a dozen times or more, and have always really enjoyed it - main course is about £15 - 20, there's a wood oven, and the menu changes most days, but normally includes a great choice of fresh fish. Quite often busy - it's better value if you order before 7pm, so it can be lively early on. There's been a recent change of chef, and a refurbishment, but the menu hasn't changed much, and the food is still consistently good. I think I'm right in saying that the previous chef is about to open up a new place in Ludlow at the Mail Room in May, so that's eagerly awaited.
If you like Thai food, there's a lively Thai bar in the centre of town (park and walk) just off Castle Square in the old Globe pub - the bar has some sofas and also tables and chairs, and you can eat either in the bar or the restaurant - there's also a separate takeaway a short walk away. For pub food in Ludlow there's also the Unicorn - this has changed hands in the last year, and we haven't eaten there ourselves since the change, but cabin guests are positive.
As for drinking, the South Shropshire area has some fantastic small breweries with some of my all-time favourite real ales. These are:
Wood's Shropshire Lad, brewed about 10 miles away at Wistanstow. Wood's brew a good few other beers, but if Shropshire Lad is in one of the handpumps, that's first choice. A darkish, unusual bitter.
Three Tuns XXX. This brew can be difficult to find in Ludlow - some of the pubs sell Cleric's Cure from the same brewery, which is also excellent, but strong enough to shorten your evening (5% or so). XXX is a light golden colour, very hoppy, and delicious. The Three Tuns, next to the brewery in Bishop's Castle, is also a great pub, and not bad for a meal.
Hobson's Twisted Spire (3.8%). The brewery is about 15 miles away in Cleobury Mortimer, and if you want a pint fresh from the brewery, try the King's Arms. Hobson's Bitter is also excellent.
There's a similarly wonderful choice of locally brewed ciders - I'd particularly recommend Dunkerton's and Dragon Orchard ciders.
If I had to single out a favourite pub, it would have to be the Sun at Leintwardine (www.suninn-leintwardine.co.uk). I don't often get there, as it's a challenge for us - it's about 9 miles away, so expensive for a taxi, but if you can manage to get over this hurdle, it's wonderful. It used to be a 'parlour' pub, simply furnished, with Hobson's out of the cask, a genuine welcome for strangers, and, up until recently, run by a landlady in her 90s with lots of good-humoured volunteer help from the community. The pub's undoubtedly different now - a lot of good thought has gone into building an extension at the back, but the 2 front parlour rooms are still as they were, and the welcome and feel of community is just as strong. You can buy fish and chips 3 doors down and eat them in the front parlour or garden.