Our 2 favorites are the Don Camillo in Bad Reichnehall and the Gebirgshaeusl in Engedey, which is just 5 min. from Berchtesgaden on the B305. The Don Camillo serves excellent Italian dishes and a fantastic Knoblauchsuppe. The pizza here is the best. It's located behind the church in Bad Reichenhall. The Gebirgshaeusl offers Austrian dishes either in the restaurant or on their outdoor deck. Non-touristy/local feel to this place. Both are reasonably priced and we've never had a bad, or even a mediocre meal in either after visiting them on many trips to the area.
http://www.doncamillo-ristorante.de
http://www.gebirgshaeusl.de/restaurant_e.html
Paul