Been 1/2 dozen times - most of those were good times. They're some good folks on the Galveston city council, and the Mayor used to ride a Ridley...maybe still does.
Places that are a "must stop" are The Spot, and an authentic dive coupla blocks further west is The Poop Deck - both on Seawall Blvd.
IMO, the best biker friendly place is way west from the tourist traps down Seawall is called Woody's...the 1st LSR for us was in Fall 2006 and happened to find Woody's by cruising around the island away from the rally proper. We parked the Train, and I immediately spotted the dyno trailer between the stilts under the wooden deck. Wasn't loaded with a bike at that moment, but about 15 minutes later they fired up an American Ironhorse chopper and we were standing at the bar rail directly over the rig...thought my wife was gonna sh!t herself