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You can react to a celebrity sighting in a restaurant in a few different ways.
A: Completely ignore, pretend not to notice, be cool at all costs.
B: Assume the celeb is too much of an egomaniac not to want attention, and flash a subtle, non-stalkery smile. Then alert Gawker Stalkers immediately.
C: Embarrass yourself by getting excited and making a scene—or by, say, playing said celebrity's music in the dining room.
Last night I was at Falai, the hyper-designed but cozy little restaurant on Clinton Street in Manhattan, where Iacopo Falai (ex-pastry chef at Le Cirque) cooks delicious, rustic-elegant Italian. As I was scraping the last bits of chestnut garganelli off my plate, Lou Reed walked in with Laurie Anderson. They were swiftly shown to the semi-private table near the door and proceeded to have a quiet, unmolested dinner. Even though the Velvet Underground got me through my teens and twenties—and even though I've never spotted Reed offstage, despite his semi-ubiquity—I went with plan A (ignore, feign cool). Falai's staff, unfortunately, chose C. Shortly after Reed and Anderson walked in, the friend I was dining with looked at me and groaned. Yes, it was "Waiting for The Man." On the sound system. Like a bad opening sequence from the Letterman show. Reed was either too engrossed in conversation to hear it—or else he chose plan A.