In addition to the observation deck, the Space Needle also has a revolving restaurant known as "SkyCity". Just for fun (and to satisfy my skybar aficionado streak), I took a group of friends up to take a look. Much to my surprise, I can honestly say that SkyCity is the best revolving restaurant I've been to and, if done right, a reasonably priced excellent addition to the Space Needle experience.
Rotating restaurants can be miserable experiences. The rotation can be too fast. The view of the inner wall and the exterior can cause motion sickness. The food and drinks can be outrageously priced and mediocre. When they are bad, they are really bad, but the Space Needle is not one of these. The rotation is a perfect speed and the view is stunning (even better than the observation deck), but the real key is that a trip to the restaurant can actually be a good deal.
The trick is this: If you going up the Space Needle, a basic ticket is $19 online or $21 if you buy it there. This gets you up to the observation deck through the main line with a timed slot (book early for your time or be prepared to wait in line). You can save by buying admission in a package, but I'll use this as a comparison. In contrast, with a reservation for SkyCity, you proceed directly to the front of the time, you can visit the observation deck after you dine, and the only requirement is that you spend at least $35 on average per person.
Depending on how you look at it, you are either going up the Space Needle for free or getting drinks/snacks for an extra $15. The entrees for dinner and lunch are expensive, but there is nothing that says you have to buy them. Alcoholic drinks, appetizers, and dessert all count towards the average and since it is average, it is perfectly fine if one person in your party orders a soda or even just water. If you want to drive the price down even more, Costco in Seattle often offers gift cards marked down 20% ($80 for $100 in value... although this is mainly for the locals since going to Costco on vacation is not a great use of time).
My recommendation? Schedule your reservation about 45-60 minutes before sunset. This will give you a view of the city both day and night, plus during the golden hour of sunset. Focus on appetizers and desserts and then drinks and enjoy the view!