When I think of greasy spoons in Toronto, Mars is always first to come to mind.
It was of course the prototypical 'American-style' I took friends to, when they were visiting from England.
Mars also serves fantastic cornmeal muffins. Notable for their fine-grained texture, these are a too rare delicacy I have never encountered anywhere else.
The one drawback of the place is its size: tiny! But a stellar establishment in the realm of greasy home-cooked food, nonetheless.