Although we do have our share of Mexican restaurants in town, there are plenty of other dining options. Texas Red's is definately a unique steakhouse (in an old cotton gin building) with a real historic local "feel." Palmers is an up-scale restaurant with a wide variety of good-eats and an amazing cocktail selection. For a younger crowd in a more relaxed atmosphere, I recommend Grins, a San Marcos staple. Grins is famous for its burgers and has an outdoor deck worth trying if the weather is good.
Have a happy birthday, and welcome to San Marcos.