We ate lunch at the Indian Coffee House in the center of town on Mullackal Rd. The cost was Rs 57 for the two of us or about $1.40 US (2010). We had masala dosa, vegetable subji, and two porottas, plus tea. I highly recommend this place. You sit down and order (English spoken), when you are done, there is a sink to wash your hand; then go to the cashier by the entrance to pay, your bill will appear.
The history of this place is interesting and you can read about it on their website
http://indiancoffeehouse.com/ It is kind of a co-op and got its existence as part of the Communist Movement in the 1950's There are many locations in Kerala and 7 in Alleppey alone.