The Sinai Star Fish Restaurant in Old Sharm comes highly recommended by all that have been. 

Its not a very nice looking restaurant.  Its very simply decorated with bench tables and chairs and you don't wait for a table, just plonk yourself down in a free gap.  There are no menus and no alcohol is served.  You can buy alcohol next door and take it in with you for no extra charge.  Try the Fish Platter - for around £12-£14 (not each) you get bread, dips, salad, bottle of a water and huge platter consisting of today's catch of the day, Squid, Garlic Prawns and Lobster.  Fantastic fresh and tasty food and lots of locals eat here too, so it must be good.

They don't serve alcohol but there is a stand across the road and a shop further down that sell chilled white wine and the staff at Sinai Star will happily serve it. 

 Not to be missed.