I'm partial to Madras Palace as the one of the very first South Indian restaurants in East Toronto. I used to come here with my family as a child and it was pretty much the only place to get Dosa in the early '90s.
The interior hasn't changed at all since, and it does come with it's issues as Kartik K. noted in his review. It's not cozy and the internal temperature might put a damper on a dining experience so come prepared. The service is decent but they are pretty short staffed, and there is usually but one waiter.
They serve a mean Masala Dosa and Uttapam, but you'll want to steer clear of their Northern dishes or you'll be disappointed. I prefer the Cheese Dosa, requested with Paneer.