An excellent restaurant, both upstairs and down. My general suggestion for newcomers is to try upstairs first. With more choice and a lower sticker shock it's a great experience all around. The food is as fresh and great tasting as any restaurant you will eat at...ever. I have eaten in many fine restaurants, but I still consider Chez Panisse the best. The menu may seem wimple at first, "goat cheese salad?" you may say. But you've never had a goat cheese salad like this ever before.
If the food makes one smile and laugh involuntarily, I consider it a sign of a good dish. Chez Panisse will keep you smiling throughout the meal, and throughout the rest of your day.
Also, a quick note to some folks who claim the atmosphere to be stuffy or uninviting. Nothing could be further from the truth! I have yet to wander in wearing anything more fancy than jeans and a t-shirt, and have never seen or heard grief from any of the staff. I love it because it's simply comfortable, inviting, and a pleasant experience, without need for dress up or pretension.
If you'd like pretentious and over-wrought do a search on "The French Laundry."