Gillian
When I'm in Nafplio I always eat at least once in the Fanaria in the street which runs just above the main square. (Staikopolo Street, I think, but you can't miss it. It's full of restaurants.) The appeal of the Fanaria for me is that it's old fashioned. The food is good and the people are friendly, but it doesn't always have a lot of atmosphere.
Almost opposite is the Vasilis, which tends to be a bit livelier.
Slightly off the beaten track, with great food and a really friendly atmosphere, is the Pseiras. There are good directions here, so I won't repeat them.
http://www.greecetravel.com/nafplio/pseirasreview.htm
No live music the evening I was there but various locals bought me wine to celebrate the fact it was Independence Day.
Have a good trip.
Alan