Venice has some wonderful restaurants, featuring the cuisine of the Veneto. However it is widely regarded that the restaurants in Venice serve food of a quality and in quantities much lower than anywhere else in Italy. The pizza in Venice is well known as being the worst in Italy (It is a more southern italian speciality).
Near the Rialto bridge there's a row of restaurants with tables by the canal, where you can have the quintessential Venice experience of dining by the canal lights. Although they do have waiters outside bugging you, some have pretty acceptable quality for price, which is almost always expensive anyway.