Firstly, I confess that I have only ever been to this restaurant at lunch time (twice) because I have always been staying in Funchal (and it is quite a long way away). I am however seriously considering how to organise my next trip so that...I can stay at the hotel for a few nights, and get to explore the island a bit better.
The restaurant itself has a great balcony, with a magnificent view (even in the rain!). The freshly made bread is excellent - go down and visit the bakery if you can. It is also possible to buy bread to take away with you, which I would also highly recommend. The food was great, and the staff were really lovely.
It is a however a destination for tour groups, most of which do not get out onto the balcony (they are usually seated inside the restaurant), so I would advise that you see whether you can do to go under your own steam or miss out big time. The view is to die for.
Would I go again - Yes. Would I like to see what the view is like at dusk - Yes.More