^
First off, I agree: March is definitely the time to be there. My best friend lives in KW, so I've been down basically at all times of the year and March is the best.
I was there this time for 8 days and ate at all of the restaurants that I mentioned. Michael's is fantastic: steaks and seafood. I try to go there every time I visit. Sarabeth is great - for breakfast or dinner. Blackfin is a new favorite. It is on Duval and has probably the best burger I've ever had. Not too pricey, either. Service is first rate. Martin's is on Duval, upscale, great seafood and martinis.
I've been to Latitudes (the restaurant on Sunset Key) before and the food was much better. I might just have had a not great meal this time. They've recently reconfigured the restaurant so that you can see sunset from the restaurant (basically moving the restaurant to the other side of the dock). It is MUCH better than being at Mallory Square (cruise ships often block the view).
My advice would be to get a reservation there about an hour before sunset. Folks tend to linger at their tables and if you have a reservation within 30 minutes of sunset, you probably won't get to see it from your table. Oh, and for planning purposes, the boats head out to Sunset Key at 15 minutes and 45 minutes after the hour, so be sure to factor that in to your planning...
-- Dave